BUSINESS GUYANA - 2012
GUYANA - Energised With Opportunity
4. Editorial
CONTENTS
7. President’s Message 8. Guyana’s Private Sector Forging Ahead 10. Our Country 20. Guyana’s Stable Political Environment 23. Competitive Market 26. Cheaper, More Reliable Electric Power 30. Output of Selected Commodities 2011 33. A Business Icon Speaks 39. GO-INVEST - Bio-Energy 42. Petroleum Act 44. IAST Retools as Regional Leader 48. Essequibo - Diverse Opportunity Abound 56. GENEQUIP 59.
Guyana Goldfields
62.
AMCAR
64.
Guyana’s Maritime Industry - Next Level
67. National Budget 2011 71.
RAM & McRAE - Investor’s Guide
88. Foreign Countries Represented in Guyana 89. Guyana Foreign Missions 90. Business Contacts
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BUSINESS GUYANA - 2012
Editorial O
ur third edition of this publication is the biggest one yet. We received phenomenal responses for our previous editions so this year we decided to scale up the content and provide more analysis regarding the business environment in Guyana. We saw two significant events last year that inspired confidence and boded well for the business environment in Guyana. The economy recorded a 5.4 percent annual economic growth rate, representing six consecutive years of positive growth. Also, the nation presided over calm and peaceful national and regional elections. This 2012 edition examines the new political landscape that emerged after the elections and what the implications are for the business environment. While Guyana continues to aggressively pursue oil and gas exploration activities, there also has not been a slowdown in the quest to tap into the country’s alternative energy potential. In this edition, we focus on alternative energy projects being pursued. For example, Go Invest outlines some of the opportunities available in bio-energy development and we examine various alternative energy projects being pursued by the Institute of Applied Science and Technology (IAST). Similarly, as we explore some of the initiatives aimed at providing reliable and cheaper electricity, we discuss the role renewable energy plays in the overall picture. Also in this edition we examine the prospects and opportunities in the vast Essequibo region. The aptly named ‘Cinderella County’ has tremendous opportunities in a diverse range of sectors, including, forest products, rice, other crops and livestock, retail, manufacturing, eco-tourism, aquaculture, entertainment, and others. We return this year with the popular Q-and-A segment with one of the country’s foremost business icons – Mr. Yesu Persaud of Demerara Distillers Ltd., who shares his thoughts and opinions on a number of issues pertaining to his company and Guyana’s investment potential.
Clinton Urling
President Georgetown Chamber of Commerce & Industry
This year’s magazine also includes suggestions from shipping magnate Mr. Clinton Williams on the upgrading of Guyana’s maritime infrastructure, as we consider the new emerging economic environment. I am highly optimistic about the prospects of our economy in 2012. Guyana’s economy is projected to grow for a seventh straight year and will no doubt be spurred on by oil exploration and mining activities. Thanks to all the contributors and staff of the Chamber Secretariat for the extensive and comprehensive work they have put into this production. Likewise, commendation is well deserved for Advertising and Marketing Services (AMS) for the wonderful job they have done with layout, design and publishing over the years. I look forward to your comments and review of this edition. Please do not hesitate to send all comments to clintonurling@gmail.com or gtchambe@networksgy. com. Clinton Urling President Georgetown Chamber of Commerce & Industry
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BUSINESS GUYANA - 2012 BUSINESS GUYANA is published annually for the Georgetown Chamber Of Commerce & Industry (GCCI) by: Advertising & Marketing Services (AMS) P.O.Box 101582, 213B Camp Street, Georgetown, Guyana Tel: (011592) 225-5384 Fax: (011592) 225-5383 E-mail: mail.amsguyana.com Publisher & Editor: Lokesh Singh lokesh@amsstlucia.com Advertising Sales: Lokesh Singh Adrian Pryce Vickram Singh Amrita Mangal Milessa Daniels Graphic Design & Layout: Mensah Fox Editorial Contributors: Lokesh Singh Clinton Urling Seema Rambaran Clinton Williams Office of the President GCCI Ram & McRae GO-INVEST GENEQUIP AMCAR Guyana Goldfields Inc. Cover Design: Mensah Fox & Cecil Sylvester Contributing Photography: Mensah Fox Adrian Pryce Gavin Ramnarain Kampta Persaud GINA Guyana Geology & Mines Commission Office of the President Caribbean Container Inc. John Fernandes Ltd. GUYSUCO CGX Energy REPSOL Guyana Marketing Corporation WWF © Copyright 2012. Reproduction of any material without the permission of AMS & GCCI is strictly prohibited. AMS and GCCI wish to express sincere thanks and appreciation to all parties who have assisted in making this publication a reality. For further information on investing in Guyana contact: Georgetown Chamber of Commerce & Industry 156 Waterloo Street, Georgetown, Guyana. Tel: 1 592 - 225 5846 Email: gtchambe@networksgy.com Website: www.geochamberofcommerce.org
Business 2012
An Investor’s Guide to Doing
GUYANA
Business in Guyana
Energised with Opportunity
A FREE Publication of the
Georgetown Chamber of
Commerce & Industry
S
&
ADVERTISING MARKETING SERVICES
BUSINESS GUYANA - 2012
PRESIDENT’S MESSAGE
A
t a business luncheon hosted by the Guyana Manufacturing and Services Association (GM&SA) during the 2011 elections campaign, I outlined a number of measures that are critical for the continuation of growth and development in Guyana. Recognising the important role of the Private Sector, I am committed to continue the promotion of policies and initiatives aimed at attracting investments and enhancing exports. This assurance was further enshrined in our contract with all the people of Guyana – our developmental blueprint for the next five years. Over the years, the Government of Guyana has made tremendous strides in providing the enabling environment for investment attraction and export promotion. At the macro-economic level, amidst global recession, Guyana has experienced positive economic growth for the past six (6) consecutive years. In fact, in a recent Executive Board Assessment of the International Monetary Fund (IMF) the Directors commended the Guyanese Authorities for macroeconomic policies that have supported resilience in the face of external and domestic shocks. The assessment further noted that while the private sector is engaged in major plans for the exploitation of Guyana’s natural resources, the public sector is complementing by way of large investments in related infrastructure such as energy. The public-private approach has its genesis in the National Competitiveness Strategy (NCS), which stems from the National Development Strategy (NDS). The NCS facilitates publicprivate partnership at the highest level of decision-making in Guyana, through the National Competitiveness Council, which is chaired by the President of Guyana and includes Senior Private Sector representatives. The on-going implementation of the NCS, which is also supported by the Low Carbon Development Strategy (LCDS), has been great enhancements in areas that support private sector trade and investment. Specifically, agencies such as the Guyana Revenue Authority, Guyana Deeds Registry, Guyana Office for Investment, Guyana National Bureau of Standards, Guyana Livestock Development Authority and Guyana Marketing Council, to name a few, are now well poised to provide the required support to current and prospective investors and exporters. Despite significant progress, there are still some areas that need further attention and it is in this light that I committed at the GM&SA luncheon, to continue the advancement of the supporting environment. Guyana’s economic infrastructure, vis-à-vie, transportation, energy, telecommunication and access to finance, are continuously being developed and these also have a considerable impact on the profitability of investors and exporters.
H.E Donald Ramotar President, Republic of Guyana
Amongst the many initiatives, which investors and exporters can look forward to, are the development of hydroelectricity, a new fibre optic cable, the construction of a deep-water harbor, an all-weather road to Brazil and a bridge to Suriname. These major projects will be complemented by a commitment to continue to provide an environment that is conducive to supporting investment by harnessing the unquestionable entrepreneurship of our people. Investors in Guyana enjoy a comparative advantage as a result of our strategic location as the gateway to South America and access to over 300 million consumers; vast natural resources such as forests (including rainforest), bauxite, diamond, gold, and oil, dutyreduced market access based on regional, bi-lateral and preferential trade agreements; only English speaking population in South America; competitive, educated and hardworking labour force; and investors’ friendly policies. Among the sectors which currently benefit from special incentives, are: agriculture and agroprocessing, seafood and aquaculture, manufacturing, tourism, IT enabled services, mining and energy. Some of the many incentives available in these sectors are: tax holidays, waivers of customs duties, Value Added Tax (VAT) and Excise Tax allowances, and unrestricted repatriation of profits. I invite you to call on the Guyana Office for Investment (GOINVEST) and explore the numerous areas of opportunities that we continue to make available to investors and exporters as we work towards the further growth and development of our country.
H.E Donald Ramotar President, Republic of Guyana
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BUSINESS GUYANA - I2012
PRIVATE SECTOR COMMISSION
GUYANA’S PRIVATE SECTOR Forging Ahead
T
he Private Sector Commission is proud to be associated with this commendable magazine, Business Guyana, which has now become an annual feature of the Georgetown Chamber of Commerce and Industry and provides a significant source of information for potential investors.
Mr. Ramesh Dookhoo Chairman Private Sector Commission Aerial View of Georgetown
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Guyana has long been hailed for its abundant natural resources and its potential to be a major player among the Caribbean economies. This fact is increasingly being recognized by investors, many of whom are now discovering Guyana, and the government has been instituting policies designed to encourage foreign investment. The Investment Act of 2004, for example has made it possible for both local and foreign investors to operate on a level playing field with
BUSINESS GUYANA - 2012
no differentiation between them under the law. Foreign investors are also allowed to own land and to repatriate their profits. The government has also produced a more conducive environment for investors with the creation of several industrial estates. More recently, the government has actively targeted investors who wish to take advantage of Guyana’s tremendous agricultural potential by making 200,000 hectares of non-forested land available for agroindustrial projects. The earmarking of non-forested land is in keeping with the country’s Low Carbon Development Strategy (LCDS) under which there is a clearly outlined policy to foster development without the sacrifice of the country’s forested resources. While the country has long been dependent on a small number of traditional exports such as rice, sugar, bauxite and gold, there is now a defined policy of economic diversification and the services sector is growing exponentially. The proliferation of call centres is a relatively recent development attributed to our educated, easily trainable and affordable work-force. Also increasing in importance is investment in agroprocessing and aquaculture and agroprocessing exports have grown by an annual average of 9% since 2000. Guyana’s economy grew by 5.4% in 2011 and foreign investments,
particularly in the petroleum sector, promise to yield even higher growth in the medium and long term. There is also growing interest in investments in alternative energy projects. While the government continues to invest in infrastructure for development, there is growing interest in Public-Private Partnerships (PPP’s) in infrastructure and the private sector has been responding to the opportunities available for such partnerships. A recent example of a successful PPP has been the construction of the Berbice River Bridge. Guyana is also a party to several trade agreements which allow for special entry of its exports to markets abroad. Most notable of these is the Economic Partnership Agreement with the European Union which allows for entry into the European market of many of Guyana’s exports.
The market oriented policies of Guyana’s government has meant that most of the increasing growth of the economy is being driven by the private sector and the private sector has accepted its role as the engine of growth. Since 2006, through the National Competitiveness Strategy, the Private Sector Commission has had a formative role in government policy and it has been influencing the creation of policies designed to foster the growth and development of the country. The introduction of a Value-Added Tax and the more recent reduction of corporate taxes by 5% have been influenced by the Private Sector Commission. Finally, The PSC has every confidence that the new Parliamentary dispensation will lead to a more accountable and open political culture, which will create a favorable economic environment conducive to the country’s development.
Construction in Progress - East Bank Four Lane Highway
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BUSINESS GUYANA - 2012
OUR COUNTRY
Our Country
EMERGENCY NUMBERS Police: 911, 564 Police: Emergency Response Unit: 225-6411 Fire: 912 Ambulance: 913 TIME ZONE GMT - 04:00
LOCATION Guyana is situated on the north east in South America and is the only English-speaking country. It is between 1° & 9°North Latitude and 57° & 61° West Longitude, bordering Venezuela to the West, Brazil to the South and Suriname to the East. CLIMATE Guyana is a tropical destination that is pleasant and warm for most of the year, humid, moderated by northeast trade winds; two rainy seasons (May to June, November to January). Average temperatures 24 °C– 31 °C. Mean temperature of 27 ° C and the average temperature range from 24 ° C to 31 ° C. Rainfall is approximately 2,300mm a year in Georgetown. GEOGRAPHY Guyana is the third-smallest country in South America after Suriname and Uruguay, it has four distinct geographical areas: the Low Coastal Plain; the Hilly Sand and Clay Belt; the High Land Region and the Interior Savannah. The area in square kilometers is 214,969 (83,000 square miles). About 85% of the land area is still forested, and only 2.5% is cultivated. The coastline lies 1 to 1.5 meters below sea level at high tide necessitating elaborate systems of drainage canals. The most valuable mineral deposits are bauxite, gold, and diamonds. The main rivers are the Demerara, Berbice, Corentyne and Essequibo. GOVERNMENT Guyana became independent from Britain in 1966 and a “Cooperative Republic” in 1970, when a non-executive President replaced the Governor-General. A new constitution in 1980 gave the President wide executive powers. The Cabinet is headed by the President, and there is a 65-member National Assembly elected by proportional representation. ECONOMY The agricultural sector accounts for half the national GDP, producing sugar and rice for export, with extensive timber
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operations and a range of other products, from coffee to fish, fruits, fresh vegetables and well–respected brands of rum. Gold, bauxite and diamonds are mined. HEALTH There is a risk of malaria in certain parts of the interior. Consult your doctor for the required precautions if you intend to travel there. Georgetown and coastal areas are Malaria-free. Georgetown has one public and several private hospitals. Municipal hospitals and health care centres exist within rural and outer lying communities with medivac services available in cases of emergency. INTERNET For most I.T consumers, internet service is available nationally from independent providers. Service is also available in most hotels and at many internet cafés which have been established across the country. Some hotels and restaurants provide WI-FI at no charge to patrons using their laptops. LANGUAGE The official language is English, often spoken with a Caribbean Creole flavour. Guyana is also the only English speaking country in South America. MEDIA There are four daily papers: Stabroek News, Guyana Chronicle, Kaieteur News and the Guyana Times. The well respected Catholic Standard and The Mirror are published weekly. There are over 20 TV stations: most rebroadcast US and other imports. GTV and GBC have merged as one entityNational Communication Network (NCN) operating as Voice of Guyana, Radio Roraima and 98.1 FM, the main radio stations. PLACES TO WORSHIP The predominant religious groups are Christians, Hindus and Muslims. Each is well represented with its own churches, temples and mosques. Places to worship are also very dominant across the country in most villages where they are major landmarks featuring traditional architecture of the various groups. POPULATION Approximately 751,223 (Census 2002) of which 90% live along the coastal strip and banks of major rivers.
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BUSINESS GUYANA - 2012
Aracari Resort Grand Coastal Hotel
Jubilee Resorts
Hurakabra
Wonotobo Resort
Fair View
Atta Lodge Iwokrama Canopy
Karasabai
Adventure Guianas Villa & Courtyard
Surama Walkway Aranaputa Wowetta
Conservation International Concession
Rewa
Yupukari
Savannah Inn
Nappi
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OUR COUNTRY - TRAVEL
BUSINESS GUYANA - 2012
TRAVELLING AROUND
The New Branding for Official Taxis
ENTRY REQUIREMENTS
TRANSPORTATION
All visitors to Guyana are required to have a valid passport to enter and depart Guyana. All visitors to Guyana should ensure that their passports have at least six months of remaining validity. Those arriving by air require a return ticket.
DRIVING IN GUYANA Traffic drives on the left. Seat belts are necessary by Law. If travelling to Guyana and you wish to drive, please enquire with the Customs Officer upon entry into Guyana for a local driving permit. Be sure to walk with your international licence to show. The permit is granted on the spot and is free of charge.
Visitors who wish to extend their stay may contact the Ministry of Home Affairs at 60 Brickdam, Georgetown. The Central Office of Immigration, located on Camp Street, Georgetown, must also note the extension in the visitor’s passport. Travelers for purposes other than tourism should check with the Ministry of Home Affairs for information about requirements for work permits and extended stays. On arrival, Guyanese Immigration normally grants visitors a stay of no more than thirty days. Visas are necessary for all visitors except nationals of the following countries: Commonwealth Countries Belgium Denmark France Germany Ireland Italy Republic of Korea Luxembourg The Netherlands Norway Spain Sweden United States of America For further information contact the Consulate or Guyana Foreign Office nearest to you.
Finland Greece Japan Portugal
TAXI AND BUSES Georgetown is well served with taxis, which operate throughout the city and to other urban centres. Taxis are easy to find outside most hotels and throughout Georgetown. Enquire of the rates before embarking upon travel. Private taxis are easily arranged through your local hotel or by calling one of the recommended taxi services. There are also ultra–cheap mini buses running around town and along the coast, or to the Cheddi Jagan International Airport and Linden. Check and confirm the fares before entering the vehicle. Transportation around the city is provided by privately owned mini buses which operate in allocated zones for which there is a well-regulated fare structure. This arrangement extends to all mini bus routes throughout the country. Taxis afford freer movement around the city. RIVER BOATS & FERRIES With the opening of the Berbice Bridge between East and West Berbice, travelling time is lessened for commuters from Georgetown to Berbice and onward travel to Suriname via the crossing at Moleson Creek.
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BUSINESS GUYANA - 2012 Aircraft used for Domestic Flights
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Commuters to West Demerara travel by road from the East Bank of Demerara and cross at the Demerara Harbour Bridge. The highway which begins on the West Coast of Demerara is heavily trafficked since it provides a link to Parika on the east bank of the Essequibo River which has become an important centre of economic activity in the Essequibo region. For example, speed boats or other types of marine transportation can be hired to take passengers as far as Bartica or other hinterland resorts and back in a single day.
INTERNATIONAL & REGIONAL CARRIERS Guyana’s international airport, named after the late President, Cheddi Jagan International is at Timehri, 25 miles south of Georgetown. Flights from Europe are routed through Antigua, Barbados, or Trinidad. There are direct flights from Miami, New York, Toronto, Brazil, and Suriname.
DOMESTIC AIR SERVICE Air transportation is readily available for travelling to several parts of the hinterland, whether for business or for pleasure. Several local airlines depart from Ogle International Airport on the East Coast of Demerara and from Cheddi Jagan International Airport, Timehri. Information on their availability and movement is easily obtainable from their office and from tour operators. Private charter companies operate flights into the interior from the upgraded Ogle International Airport.
• Meta Airlines. Tele :225-5315 www.voemeta.com
• Suriname Airways Tele: 225-4894/3473 www.surinamairways.net
• Delta Airlines Tele: 225-7800 www.delta.com
• Blue Wings. Tele: 225-9647 www.bluewings.com
• Air Services Limited. Tele: 222-4357/222-4368 www.airservicesltd.com
• Roraima Airways. Tele:225-9647/8 www.roraimaairways.com
• Trans Guyana Airways. Tele: 222 2525/2861 www.transguyana.net
• Wings Aviation Ltd. Tele: 222-6513 / 226 9098 www.airguyana.biz
• Caribbean Airlines • LIAT. Tele: 1-800-538-2992 Tele: 227-8281/1-888-538-2992 www.caribbean-airlines.com www.liatairline.com
DEPARTURE TAX There is an exit tax of G$2,500.00 plus a security charge of G$1,500 (being a total of G$4,000). This is paid at the airport at the GRA booth. (The US dollar equivalent for this exit tax may vary with exchange fluctuations.) Please note that this is payable in GY$ or foreign currency.
BUSINESS GUYANA - 2012
Money
OUR COUNTRY - MONEY
The Bank of Guyana
BANKING HOURS Banking Hours at most banks are relatively short: Mondays to Thursdays: 8am to 2pm Fridays: 8am to 2:30pm The main commercial banks are: Bank of Baroda Ave. of the Republic, Georgetown • Tel: 226 4005/6 Bank of Nova Scotia Carmichael Street, Georgetown Tel: 225 9222 Citizens Bank Camp Street, Georgetown • Tel: 226 1705/6 Demerara Bank Camp Street, Georgetown • Tel: 225 0610/9 Guyana Bank for Trade and Industry Water Street, Georgetown, • Tel: 226 8430/9 New Building Society Ave. of the Republic, Georgetown • Tel: 227 4444 Republic Bank Guyana Ltd Water Street, Georgetown • Tel: 226 1691/5/4091
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CURRENCY The unit of currency is the Guyana dollar, which floats against the US dollar. (Exchange rate at the time of publication: US$1=G$204* *approximate value, check for daily rates.) US dollars are widely accepted. British, Canadian and some other bank notes may be accepted as well. Foreign currency can be changed at banks, finance houses, and cambios. Many hotels will change money but generally give a lower rate. CAMBIOS These are licensed currency exchange houses. Most cambios are open from 8am to 5pm, and on Saturdays from 8am to 12pm, sometimes to 2pm. Keep your cambio receipt, you will need to produce them in order to change Guyanese dollars on departure. CREDIT CARDS Major credit cards and travellers cheques are accepted by most hotels, restaurants, car rental agencies and tour operators. International Visa, Mastercard, Maestro and Cirrus credit and debit cards can be used to obtain cash from the Bank of Nova Scotia
in Branch during banking hours or at ABMs. A similar service is also available at the Guyana Bank for Trade and Industry (GBTI) at their branches and at select ATM locations. GUYANA STOCK EXCHANGE Guyana Association of Securities Companies and Intermediaries Inc. (GASCI) is a “self-regulatory Organization” which was formed for the purpose of developing a Stock Market in Guyana. It is the result of earlier work undertaken by the Adam Smith Institute funded by the UK Department. GASCI was incorporated on June 1st, 2001. Trading commenced on June 30th, 2003. The Stock Exchange was formally launched on September 25th, 2003. Its members consist of the four securities companies registerd to trade on the Stock Exchange viz. Beharry Stockbrokers Ltd., Guyana America Merchant Bank Inc., Hand-in-Hand Trust Corporation Inc. and Trust Company (Guyana) Ltd. It is governed by a board of six directors. Trading currently takes place on Mondays and on Wednesdays. When Monday is a holiday, trading starts at 10:00am.
BUSINESS GUYANA - 2012
STABLE POLITICAL ENVIRONMENT
Guyana’s Stable Political Environment Is A Win-Win Situation for Economy and Investors
I
t is no secret that a stable political environment is a major prerequisite for anyone looking to invest in a country for business purposes. Not surprising then is the connection between Guyana’s recent vigorous gains in economic development and a stable political environment that has been in place since 2006. In the fouryear period ending in 2010, Guyana’s economy grew by approximately four percent annually. Fortunately, this trend is expected to continue following
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the nation’s relatively peaceful general and regional elections in 2011 and the cordial political atmosphere that has emerged since then.
just how difficult it was for the country to attract investments, achieve macroeconomic stability, and improve productivity.
Historically, one of the most pervasive and detrimental factors constraining Guyana’s economic development has surrounded the issue of political instability. In Guyana, as in many other nations that have experienced similarly volatile political environments, the period before 2006 demonstrated
Furthermore, the previous political climate discouraged the government as well as foreign and domestic firms from investing in research and development essential to growing a market economy with competitive goods and services. Likewise, the negative global and regional press generated
BUSINESS GUYANA - 2012 Parliament Building
whenever there is a politically unstable environment often leaves a pervasive, and often exaggerated, less-thanfavorable image of the country that frightens potential investors and skilled personnel from seeking employment. In the last half century during Guyana’s three longest periods of economic growth – 1964-1968, 1992-1997, 2006-present – the single common characteristic for success has involved an effective modicum level of political accommodation and maneuvering space for the governing administration to operate and negotiate. Guyana’s most recent elections in 2011 resulted in an unprecedented situation where no one political party managed to achieve a simple majority of the votes in the nation’s parliament. Thus, the nation’s ruling party did not have the required majority to pass legislation in the parliament without having at least one of the other parties supporting its proposals. Likewise, the opposition parties, whose numbers when combined hold a parliamentary majority, could vote against government proposals and manage to pass their own versions of legislation which then would have to be accepted by the ruling governmental coalition. Moreover, this new dispensation has led to the three main political parties – namely, the People’s Progressive Party/Civic (PPP/C), A Partnership for National Unity (APNU), and the Alliance
for Change (AFC) – engaging each other in an extra-parliamentary process that is popularly known as the “tripartite initiative.” As a result, these three political parties now have the essential impetus to bargain and negotiate issues of national importance, many of which underscore Guyana’s potential for growing its market economy. The initiative has engendered constructive policy dialogue leading to consensus outcomes in an unprecedented atmosphere of political peace and goodwill. This new political environment potentially ensures broader participation of the whole political spectrum represented in the nation’s parliament, unquestionably a win-win prospect for all concerned. The multi-partisan dynamic of Guyana’s political participation also augurs well for the economic and business environment in Guyana and the mutual challenge is to ensure that such an environment is nourished and cultivated through wise policy making. The historical evidence unequivocally suggests that Guyana’s long-term economic success is intrinsically tied to a stable political climate that, in turn, encourages all policy makers to cultivate a national consciousness in both the political and economic communities that agree upon the common values inherent with the advantages of market economy progress and modernization.
Parliament In Session
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BUSINESS GUYANA - 2012
The Road to Enhanced Economic Efficiency is Built by a Competitive Market By Seema Rambaran, Director Competition and Consumer Affairs Commission
G
lobalization has given rise to the assimilation of national markets and international interdependence for a wide range of goods and services. In this evolving milieu, Guyana through sound economic strategies and deliberate political policies, has managed sustained levels of growth.
Within the last four decades, Guyana has witnessed consistent economic development by supporting its traditional productive sectors as well as encouraging relatively new and emerging sectors to compete in the market. Strong and effective markets are
nurtured through the promotion of robust competition between enterprises. Consumers, in turn, become the ultimate beneficiaries of such relations as they are afforded multiple opportunities and options. Consumers are at the heart of the economy and its efficacy, and as such require safeguarding from practices
Further, while encouraging trade and business internationally and continuing to fortify its regional network, Guyana has succeeded in remaining relatively unscathed by the global economic crises. The Economic Commission for Latin America and the Caribbean (ECLAC) in its 2011 Preliminary Overview, which was released on December 21, indicated that Guyana’s economy sustained healthy expansion in that same year despite continuing difficulties in major export markets, such as the United States and Europe.
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BUSINESS GUYANA - 2012
that seek to stifle their privileges. Guyana embraces this rationale and has initiated actions for protecting its consumers. It has introduced A National Competitiveness Strategy which highlights diversification of the economy and increased productivity, goals that will be achieved through sound competition policy. The Government of Guyana and the private sector have forged a more positive relationship, in recent years, creating open lines of communication on government policy. One of the important functions of government is to generate an enabling environment in which enterprises will operate with negligible interference. Within this framework, Guyana’s Competition and Fair Trading Act of 2006 (CFTA) and the Consumer Affairs Act of 2011 (CAA). These are expected to advance a competitive environment for business enterprises, thereby increasing efficiency in the market. In that vein, the Competition and Consumer Affairs Commission (CCAC), under the auspices of the Ministry of Tourism, Industry and Commerce (MINTIC), is tasked with promoting, maintaining and encouraging competition throughout Guyana by prohibiting the restriction and prevention of competition in trade and the market. These limitations include unfair business practices such as abuse of a dominant position and engaging in anti-competitive agreements.
Further, it is expected that via the mandate of the aforementioned legislations, the Commission will promote the welfare and interests of consumers by keeping under review commercial activities with a keen interest in identifying practices that may adversely affect the economic interests of consumers. By ordering investigations, as necessary, in relation to the conduct of business, the Commission will be able to identify practices that are in contravention of the CFTA and the CAA. The Commission shall take such actions as necessary with respect to abuse of a dominant position by any enterprise(s) or misuse by a firm(s) of its position against consumers. These actions include investigating an alleged abuse of a dominant position, notifying the enterprise of its findings and directing the enterprise to cease the abusive practices. Ultimately, the Commission shall seek to eliminate anticompetitive agreements throughout
Guyana while encouraging a fair and competitive market. The CFTA and CAA, through the Competition and Consumer Affairs Commission intend to level the playing field for both local and foreign investors, by facilitating increased profits, adding diversification in products, and creating a more efficient and liberal market. The Commission is prepared to carry out its mandate by investigating complaints of anticompetitive practices while sensitizing the business community of their vital role in enhancing commerce. In doing so, Guyana is setting the stage for a more vibrant economy enhanced by competition, supportive regulations and transparent business conduct. The road to enhanced economic efficiency is built by a competitive market governed by fair play. Stronger regulation and more open markets make Guyana ripe with investment opportunities.
Seema Rambaran, Director Competition and Consumer Affairs Commission
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BUSINESS GUYANA - 2012
CHEAPER MORE RELIABLE ELECTRIC POWER
Improvements Targeted Toward Cheaper, More Reliable Electric Power In Guyana
G
uyana is stepping up its efforts to provide cheaper and more reliable electricity. This effort is even more urgent after recent surveys of private sector companies indicate that the high costs and less-than-ideally reliable electric power generation are prime factors for inhibiting business development and expansion. In bolstering its business-friendly profile, Guyana is turning to a
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combination of exploration for fossil fuels, the utilization of alternative energy and the upgrading of infrastructural capacities of the state-owned Guyana Power and Light (GPL) Company. Regarding the current electrical utility grid, which is administered by GPL, power generation depends completely upon relatively expensive fossil fuel sources and those costs are inevitably passed down to commercial and
residential consumers. However, there is much hope and optimism that numerous onshore and offshore exploration activities currently underway for comparatively less expensive oil and gas in local sources would pay dividends in the near future – to the mutual benefit of utility consumers and the government-run power plants. Additionally,
GPL
has
extended
BUSINESS GUYANA - 2012
its development and expansion programme through 2016, which is targeted at significantly improving the stability, reliability and quality of electrical supply in Guyana. This would be achieved primarily through two means: upgrading infrastructure and developing and utilizing sources of “green” or alternative power sources.
Hydro Electric Generation Process
Infrastructure Development Project (IDP) Among the extensive improvements proposed for modernizing and expanding Guyana’s capacity for generating electric power are new transmission lines to integrate the power load centers in Demerara, Berbice, and Essequibo into a national grid. Other enhancements include reinforcing the networked connections between the Sophia and Kingston substations to accommodate the power load expected from the Amaila Hydroelectric Project as well as converting the 22-megawatt Wartsila Plant at Kingston from 50- to 60- hertz capabilities.
Artist Impression Amaila Falls Hydro Electric Project
Likewise, the installation of two 6000kVA (kilo volt amps) gensets at Leguan and another at Wakenaam will allow GPL to provide 24-hour service in those areas. New substations also will be installed in strategic locations GPL Kingston Wartsilla Plant
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BUSINESS GUYANA - 2012 Skeldon Sugar Factory - Berbice
to ensure viable distribution outlets to off-load feeds that can accommodate further growth in network capacity. Other installations are expected in Anna Regina and Bartica.
grid: The Amaila Falls Hydroelectric Project and the Skeldon Bagasse Cogeneration Project.
The Infrastructure Development Project is expected to be completed by the end of 2013.
Guyana has at least 67 potential hydropower sites identified with a total estimated output capacity of 7000 megawatts. A major step toward realizing this potential arises from the current 165-megawatt Amaila Falls Hydroelectric Project that is expected to be completed by 2015. This would
Renewable Energy Sources Guyana has many natural endowments that make it suitable for developing alternative and renewable energy sources that could reduce the cost and reliability of electricity. The country has a tropical, sunny climate with many inland streams and waterfalls along with substantial wind flow characteristics on coastland and hinterland regions that could be harnessed for power generation. In addition, a robust agricultural sector could potentially translate into opportunities for implementing options using hydropower, solar energy, wind energy, biomass and biofuels. At present there are two substantial renewable programmes underway that have enormous potential to enhance the supply capacities of GPL’s power
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Hydro Power
Sugar Harvesting in Progress
mean at least 140-megawatt capacity becoming available to GPL at major delivery points in Linden and Sophia. This project is expected to provide more than 90 percent of all of GPL’s energy requirements by 2016. The Skeldon Bagasse Cogeneration Project This project comprises a bagassepowered cogeneration plant that forms part of the Skeldon Sugar Factory and allows generating enough electrical
BUSINESS GUYANA - 2012
power to both cover the company’s operational needs and to provide a sufficient load of excess power that is sold to the Berbice regional grid. The cogeneration plant uses bagasse, a biofuel from the fibrous material that remains after juice has been extracted from crushed sugarcane stalks. The plant also is equipped with diesel generating capacity for co-firing fuel oil during off-crop periods when bagasse stocks have been exhausted. The 30-megawatt cogeneration facilities were commissioned in 2008 but the plant has been plagued by operational and other inefficiencies, which has severely limited the dispatch of power from this facility. However, GPL officials are working toward newly established benchmarks that indicate the Guyana Sugar Corporation will guarantee at least 26 weeks of cogeneration operating power capacity this year and in successive periods as well.
BUSINESS GUYANA - 2012
OUTPUT OF SELECTED COMMODITIES 2011
Output of Selected Commodities 2011 ITEMS Unit Jan - Dec Jan - Dec % Main Table 2011 2010 Change Agricultural Sugar tonne 236,506.0 220,862.0 7.1 Rice tonne 401,904.0 360,996.0 11.3 Period of rice production: Forestry: total Cu M 385,501.8 410,989.1 -6.2 1. Total Logs Cu M 294,628.6 318,241.8 -7.4 Greenheart Logs Cu M 43,126.4 44,575.0 -3.2 Logs of Other Species Cu M 251,501.3 273,666.8 -8.1 2. Sawnwood Cu M 76,117.4 75,511.8 0.8 3. Roundwood Cu M 14,755.8 17,235.6 -14.4 Charcoal Cu M 12,516.8 14,584.5 -14.2 Firewood Cu M 23,348.9 16,687.8 39.9 Plywood Cu M 13,316.5 14,240.5 -6.5 Fish tonne 23,755.0 25,192.0 -5.7 Total Shrimp tonne 21,217.0 21,779.0 -2.6 Prawns tonne 375.0 931.0 -59.7 Small Shrimp tonne 20,842.0 20,848.0 -0.0 Note: Data from the Fisheries Department is always subject to revision. Table Eggs 000 23,508.3 14,169.2 65.9 Poultry meat tonne 25,573.5 24,969.3 2.4 Mining Total Bauxite tonne Calcined (RASC) tonne Chemical (CGB) tonne Metal Grade (MAZ) tonne Tailings tonne Other tonne Total Raw Gold declared Kg. Total Raw Gold declared troy oz Diamonds declared M/Carats Sand declared tonne Crushed stone declared tonne
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1,818,399.4 203,277.5 141,644.9 1,298,236.0 175,241.0 0.0 11,293.4 363,083.2 52,273 361,389.0 500,543.0
1,082,512.0 185,063.0 187,936.0 699,776.0 7,471.0 2,266.0 9,593.7 308,437.9 49,920 674,403.0 472,497.0
68.0 9.8 -24.6 85.5 2,245.6 -100.0 17.7 17.7 4.7 -46.4 5.9
BUSINESS GUYANA - 2012
ITEMS Main Table
Unit
Jan - Dec 2011
Pharmaceuticals Total Liquids litre 441,510.6 Tablets 000 18,273.9 Total Ointments Kg 10,987.7 Footwear pairs 9,802.0 Industrial Goods Laundry Soap kg 55,824.0 Stockfeed tonne 54,087.9 Corrugated Carton ‘000 Sq.M 4,186.6 Neutral Alcohol ‘000 Lpa 3,111.8 Detergent Kg 1,089,545.0 Paints Litre 2,862,128.1 Putty Kg. 420,058.1 White Wash Kg. 59,548.1 Oxygen Litre 81,880,375 Acetylene Litre 11,286,217 Gas Nitrogen Litre 5,965.0 Industrial Flour tonne 207.2 Beverages RUM 000 litres 3,527.3 Malta litre 647,614.1 Wine cases 333,176.0 Shandy cases 77,490.0 Vita Malt cases 111,170.0 Beer + Stout 000 litres 16,879.3 Total Aerated 000litres 45,246.5 Mineral/Distilled Water 000litres 18,543.9
Jan - Dec 2010
% Change
460,587.6 24,665.0 9,366.7
-4.1 -25.9 17.3
46,139.0
-78.8
119,101.0 49,454.4 3,841.4 4,660.0 1,010,526.0 2,500,234.4 386,638.8 65,799.8 89,988,403.2 6,671,372.4 4,263.0 242.7
-53.1 9.4 9.0 -33.2 7.8 14.5 8.6 -9.5 -9.0 69.2 39.9 -14.6
3,261.9 720,543.3 281,220.0 73,689.0 83,178.0 14,359.1 44,162.0 18,423.7
8.1 -10.1 18.5 5.2 33.7 17.6 2.5 0.7
Edible Items Margarine kg 2,226,035.0 2,135,422.0 Butter kg 10,039.0 6,592.0 Baking Fat / Lard kg 138,535.0 295,803.0 Ghee kg 163,213.0 141,376.0 Edible Fats (sum of previous 4) 2,537,822.0 2,579,193.0 Ice cream litres 1,640,719.3 1,392,720.8 Frostee Pop (Novelty) cases 20,821.0 51,992.0 Snack Foods kg 29,409.7 37,427.0 Biscuits ‘000 kg 1,216.7 1,182.1 Cereal kg 128,899.0 120,974.5 Flour tonne 38,577.9 39,792.1 Wheat Middling / Bran tonne 10,202.3 11,198.4 Public electricity M.W.H 645,233.7 627,370.2 Source: Bureau of Statistics Beverages in Cases Distilled/Mineral Water cases 1,191,800 1,158,608 1&5 gal bots 482,608 491,802 Distilled/Mineral Water Total Aerated 000 cases 4,591 4,386 Beer cases 1,871,189 1,596,289 Total Malta cases 94,972 105,667 Total Stout cases 604,140 509,460
4.2 52.3 -53.2 15.4 -1.6 17.8 -60.0 -21.4 2.9 6.6 -3.1 -8.9 2.8
2.9 -1.9 4.7 17.2 -10.1 18.6
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A BUSINESS ICON SPEAKS
BUSINESS GUYANA - 2012
Dr. Yesu Persaud - Chairman Demerara Distillers Ltd. Group
A Business Icon Speaks An Interview with Dr. Yesu Persaud
1. Could you tell us how Demerara Distillers Limited got started and the role you played in its development? The name Demerara Distillers Limited came into being after the merging of Enmore, Albion, and Uitvlugt Estates and Diamond Liquors Limited. Prior to
that there were individual companies. Going back to the late 1600s, Guyana was producing rum, which was sold to shops that did their own bottling and had their own brand name. The product was harsh back then because the blending was controlled by the Portuguese and excise tax was
introduced in the 20th century. The rum shops, which had to pay the excise duty in advance, could not afford to, hence causing them to close. After a while there were only four (4) distillers left: Albion, Enmore, Uitvlugt and Diamond. Albion was absorbed and eventually closed by Guyana Distillers Limited,
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BUSINESS GUYANA - 2012
Range of World Famous El Dorado Rums
and thus three distillers remained. I was asked in 1976 to be a part of the management team at Diamond Liquors Limited as a director, which I did and
Distribution Services Limited
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from then on the transformation began. The company is thriving to the best and is a renowned brand locally and internationally.
2. Why was the name ‘El Dorado’ chosen for your now international range of rum products? The ‘El Dorado’ (brand name) was owned by Uitvlugt Distillers and after the merging of the individual distillers we had to borrow money from international banks to build a new distillery. The Diamond Liquors Limited name was changed to Demerara Distillers Limited and we decided the brand name should be consolidated. El Dorado was the city of gold, which has an extraordinary and unique story behind it. We think of our product as being unique and extraordinary just as the city of El Dorado, so it seemed like the most appropriate name for our product when we decided to go international. Since then El Dorado has developed into a major brand well-known in local and international markets. El Dorado is the only brand that is known coming out of Guyana and we are proud of it. 3. What are the biggest threats and challenges facing your group of companies today?
BUSINESS GUYANA - 2012 Diamond Rum Plant
The Rum Heritage Museum
in the United States, St. Kitts and Holland (which serves the Continental market). So far the expansion has been successful and we are pleased with the development of the companies. 5. How would you assess and rate the current investment climate in Guyana? The investment climate throughout the Caribbean and Latin America is declining. Guyana has It is a well-known fact that many countries subscribe their products and in Guyana we have tremendous potential, with a to compete with those subscribed goods. The excise tax is another major threat to us, but we also have come a long way and we are determined to make our group of companies the best in the region and even the world. We have a dedicated and hard-working staff supporting us and one day we will accomplish our goal.
huge land mass yet to be discovered. More emphasis should be placed in the agriculture and the tourism sectors due to the fact that those are the main sources of revenue. 6. What advice would you give to potential investors to Guyana? I would advise potential investors to take a step and invest into this beautiful land. Guyana has great potential – 75%- 80% of it is pristine forest, along with gold, diamond, bauxite and a few other minerals that are being mined. There are more potential minerals such as manganese that was once produced in Guyana as well as lumber for export. Guyana is a rich and fruitful
4. DDL has diversified its range of products and expanded into overseas markets. Are there any future plans for further product development and market expansion? Demerara Distillers Limited has diversified not only in the rum industry, but we also are now in the shipping business, producing fruit juices and all flavours of aerated soft drinks. Some are available in the international markets. We have companies
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BUSINESS GUYANA - 2012
land just waiting to be discovered by investors. 7. Are there any important issue(s) affecting business development in Guyana that you would like to see addressed or accelerated by the policy makers? Investors when they come to buy should not have to go to several institutions to get permission to invest in Guyana. There should be one permanent agency where they can acquire all the necessary information needed for investing in Guyana. 8. Any closing thoughts? The tremendous human resource we have in Guyana is overwhelming. I firmly believe that measures should be implemented for our people to stay within the country. The crime rate is at its highest and, thus, people are migrating. Also, employment is another major issue. Well-educated and qualified Individuals are leaving our dear land to seek employment in other countries. These are all matters that should be thoroughly investigated by the government of Guyana.
State of the Art Bottling Plant, DDL, Plantation Diamond East Bank Demerara
BUSINESS GUYANA - 2012
GO-INVEST THE GUYANA OFFICE FOR INVESTMENT
Bio-Energy: Investment Opportunities in Guyana
Key advantages in geographical amenities and the agricultural expertise in cultivating crops ideal for producing ethanol and other bio-fuels potentially make Guyana an attractive partner for investors looking to develop agroenergy projects. Furthermore, Guyana can become an instrumental player in an emerging industry that provides feasible, efficient alternatives for nations and industries that historically have relied heavily upon imported petroleum and oil. In seeking job-creating bio-energy projects – in particular, producing ethanol from sugarcane and other materials – Guyana’s government is offering potential investors a package of financial and infrastructure support plus low-cost land for private bio-energy investments. With more than 100,000 hectares of suitable land available for sugar cultivation along with abundant water resources, Guyana’s officials have adopted a socially responsible
land use strategy that recognizes the need for sustainable growth within the agro-energy sector. More importantly, officials have taken great care not to compromise food production. They also have articulated strict guidelines regarding the preservation of the nation’s virgin forests. The main areas, including savannahs, grasslands and coastal low-lying lands, available for bio-energy development
are in Guyana’s northeast sector. The Canje Basin and the Intermediate Savannah have been identified as the most prominent areas for such projects. Undoubtedly, Guyana offers many promising geographical attributes for bio-energy project investors. Considered the gateway to Northern Brazil and the larger Caribbean region, Guyana allows easy access
Aerial View of Sugar Cultivation.
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BUSINESS GUYANA - 2012
being supported by the Inter-American Development Bank through financial resources and advisory services. On a broader scale for prospective investors, Guyana has made good progress in developing institutions that are more accessible and agile than the cumbersome bureaucracies of the past. It also has dedicated greater resources to upgrading its Infrastructure including a network of improved roadways, a better equipped sea port and airport, highquality telecommunication networks and the development of industrial parks. The nation also has an affordable, youthful, educated labour force that can step immediately into comprehensive training programmes for all of the eight key industry sectors (agriculture, tourism, information and communications technology, light manufacturing, services, mining, wood products and energy). to hundreds of millions of potential consumers and more than US $130 billion in business opportunities. In addition to using sugarcane, coconut and oil palm as raw material for ethanol and biodiesel production, Guyana’s agricultural and agro-energy enterprises have identified molasses – a byproduct of the sugar cultivating industry –and Japtropha (referred to locally as physic nut) as possible sources of ethanol. Another area focuses on the production of bio-gas from livestock manure. Guyana’s interest in ethanol and other bio-fuels has far-reaching implications for its formative economic development. Some 22 percent of Guyana’s gasoline consumption is accounted for by increasingly expensive imported petroleum. However, the nation’s reliance upon imported fuel could be significantly reduced by lower-cost ethanol which could be produced domestically. The cost-savings effects could ripple through every sector of Guyana’s economy. Currently, about 36 percent of the nation’s gross domestic product (GDP) is expended on imported fuels. Indeed, the agro-energy industry
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development also would enhance Guyana’s export portfolio. The nation’s current molasses production is 130,000 tonnes, of which nearly 70 percent is committed to local distillery purposes while the surplus is usually exported. Converting this surplus would yield approximately 11 million litres of ethanol. This also would nearly satisfy a key governmental objective for achieving a 10 percent ethanol substitution (11.4 million litres). As the government has geared its national competitive strategy toward cultivating a favourable climate for investors both domestically and internationally, Guyana has ensured that potential partners have convenient access to information about soil types, rainfall, water tables, transportation routes and other factors essential to greenlighting new agro-energy projects. Interested parties are encouraged to visit Guyana to tour available lands, discuss investment options and familiarize themselves with regulatory procedures. An intergovernmental Bio-energy Project Support Unit (PSU) has been tasked to review investment proposals, provide guidance and coordinate government requirements for project sponsors and investors. This initiative is
In addition, the nation’s business environment is being continuously enhanced with a well-developed banking sector, updated legal and accounting systems and increased trade links with numerous countries. The cumulative effect – along with an eye toward developing new technologies and production enterprises in emerging fields such as agro-energy – will reinforce the nation’s strategic advantages in attracting foreign investors as well as Guyanese nationals based overseas who look to participate in economically promising ground-breaking ventures.
Heart Warming Goodness... 8 New Market Street, North Cummingsburg, Georgetown. Tel: (592) 227-0079
BUSINESS GUYANA - 2012
F
Petroleum Act’s Rules Seek to Accommodate Rapidly Expanding Oil and Gas Explorations In Guyana
or the increasing numbers of investors looking to explore what may be the world’s second largest undiscovered reserves of oil and natural gas, located in the offshore GuyanaSuriname Basin, they should take note of the nation’s regulations governing the exploration and production of petroleum. As oil and gas exploration activities have intensified recently in the area, Guyana’s Petroleum Act outlines many provisions for petroleum prospecting and production licences as well as steps investors should follow after discovering reserves and the protocol for honouring governmental royalty requirements. Projects are blossoming rapidly and for good reason. The basin’s reserves potentially hold approximately 15.2 billion barrels of oil, according to the United States Geological Survey (USGS). In February of 2012, a consortium led by the Spanishbased Repsol YPF Company commenced offshore drilling, some 107 miles off Guyana coast, for a well named the Jaguar-1. The drilling is expected to go as deep as 21,000 feet, representing the deepest such well in the Guyana-Suriname Basin. Likewise, Canada’s CGX Energy Inc. recently initiated drilling for its Eagle-1 well. Investors can request Petroleum Prospecting Licences (PPL) that confers exclusive rights for exploration in a specific block location. The licences, which are subject to approval by Guyana’s Minister of Energy, specify the duration allowed for prospecting activities as well as conditions for governmental reporting requirements. A PPL may include an initial preparation period, not exceeding six months, so that the licensee can establish prospecting operations. The licensee also must submit annually a comprehensive progress report to the government. PPLs are approved initially for four years and can be renewed up to two times, with each renewal request not exceeding a maximum of three years. In other words, prospecting licences could be valid for up to 10 years. Licence holders seeking to relinquish any or all of the prospecting blocks specified during the active period must give the Ministry of Energy at least three month’s notice of its intention to vacate.
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PETROLEUM ACT’S RULES
BUSINESS GUYANA - 2012
More significantly, licensees are obligated to notify the government in writing within 30 days of any petroleum reserves that have been discovered. They also should submit the test results as well as ascertained data regarding the quantity of petroleum discovered in reserves. The licensee also has 30 days to inform the government if the reserves have potential commercial interest and value. In cases where the discovery is not worthy for pursuing full production, the government has up to 12 months to end the licence specified for that prospecting block. However, in the case of commercial viability, the PPL holder has a twoyear option to apply for a production licence, which allows prospecting and production activities to continue and for sales of petroleum to commence. Production licences will be granted once all plans for the construction, establishment and operation of all facilities and services for and incidental to the recovery, processing, storage and transportation of petroleum from the proposed production area have been approved. License applicants
also must prove that they have sufficient financial resources, and technical and industrial competence and experience. Perhaps the most critical aspects of the license requirements are those ensuring that Guyana’s economic development activities will benefit from successful petroleum prospecting and production activities. Licensees must demonstrate their commitment to train and employ Guyana’s citizens in a satisfactory manner. Also, they must outline a procurement program that includes proportional benchmarks for securing goods and services directly from Guyana-based businesses. Likewise, the license may include a provision where the licensee has to supply petroleum or petroleum products to meet in part Guyana’s petroleum consumption needs. Production licenses are approved initially for 20 years and can be renewed once for a maximum of 10 years, unless the government grants additional time. The Petroleum Act also outlines royalty payments as required by the
government, which also has indicated its willingness to work with investors on arranging payment schedules that are mutually respectful to the needs of both parties. However, failure to pay royalties not only could suspend or end production activities but they could put the licence holders at risk for substantial fines and terms of imprisonment should a conviction be successfully prosecuted. The government also reserves the right to cancel any licence if the holder defaults on any provision as outlined in the Petroleum Act. Again, though the government has indicated its willingness to work with licensees and investors in remedying any actions that might jeopardize operations from proceeding accordingly. If the default cannot be remedied, adequate compensation and actions to prevent recurrence can be made and shown, respectively. For a full copy of the Petroleum Act, interested parties should contact the Guyana Geology and Mines Commission (GGMC) or the Georgetown Chamber of Commerce and Industry (GCCI).
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BUSINESS GUYANA - 2012
IAST RETOOLS AS REGIONAL LEADER
Institute of Applied Science and Technology (IAST), Building.
IAST Retools as Regional Leader
M
in Biofuels, Bioprospecting, Eco-friendly Materials Research
ore than 35 years after its founding, Guyana’s Institute of Applied Science and Technology (IAST) has been extensively retooled with a broad emphasis in biofuels research and other projects that are adapting scientific and technological advancements for the private sector’s most immediate practical benefits ranging from construction to bridge and road maintenance and to the pharmaceutical, food, and cosmetics industries. Formed in 1977 through legislation of the Guyanese Parliament, the ISAT is an industrial research organization with
a mandate to lead “the development and/or adaptation of appropriate technology for the utilization of Guyana’s natural resources so that these resources can be gainfully developed and exploited for the benefit of the people of Guyana.” Focusing on technology transfer and middle- to latestage research, the IAST focuses its efforts in four departments: bioenergy, bioprospecting, indigenous materials, and analytical services. Steve Hermeston, CEO of the Canadian oil exploration company CGX Energy, Inc., recently described the IAST as “a leading edge research institute.” Dr. Suresh Narine, IAST’s director, has
Institute of Applied Science and Technology (IAST), Staff
44
credited Former President Bharrat Jagdeo for ensuring that funds were allocated to rejuvenate the institute’s research programs. For example, IAST’s bioenergy projects have been focused on producing biodiesel, briquettes from wood waste and crop residues, and biogas from mixtures of grasses and food and animal waste. It has developed pilot and early-stage commercial pilot plants including the Caribbean’s first commercial biodiesel operation at Mabaruma. A pilot scale biodiesel facility also is operating at its Turkeyen headquarters. Most of the vegetable and animal fat waste in Georgetown is processed here into biodiesel which the institute then uses for vehicle fuel and electric power generation as well as the other pilot scale processes. The IAST has partnered with several local companies on this initiative. Dr. Marlene Cox, acting vice-chancellor of the University of Guyana, recalls when the Institute was established on the university’s campus at Turkeyen in East Coast Demerara. “In those early days much of the research and activities here were centered on natural products chemistry, analytical
BUSINESS GUYANA - 2012
and food chemistry,” she says. “Now the focus of the research is on biofuels, the use of indigenous materials for road building and home construction and on bioprospecting.” IAST research efforts are being put to extensive practical use. Fuel at the biodiesel commercial facility at Mabaruma, which employs between 80 and 120 people, is used to generate electricity for about five to six hours each day. In addition, a pilot scale biogas facility is testing the feasibility of aquatic grasses to generate energy. The IAST has also acquired a hydraulic press to produce briquettes from wood waste and crop residues such as rice husk that is generated during the milling of rice. The IAST’s bioprospecting program includes utilizing coastal and rainforest botanicals to extract and apply bioactives in producing pharmaceutical, food, nutraceutical, cosmetics, antifungal, antiviral and anesthetic additives. Recent work has been focused on crabwood oil, karela, and lemon grass extracts. A forthcoming project is targeted at converting coconut oil into high-value chemicals, soaps, pharmaceuticals and flavourants. Pilot scale projects in IAST’s indigenous materials department have seen aggregates for road building from coastal clays being produced, which are more cost-effective than other materials and have held up well in four years of performance testing. The IAST also is exploring technology regarding low-cost clay/cement composite blocks that are compressed into full-scale commercial applications. Likewise, a pilot-scale rubber recycling plant processes rubber from used tires into crumb forms then used in the institute’s reactors to produce rubberized asphalt cement. The material is then used commercially to apply a durable, adhesive friction coating to the steel decks of bridges throughout Guyana. The Institute also can produce plastic/fibre composites from recycled and virgin plastic resins as well as fibres from wood waste and crop residues. The current focus is on composite roof tiles, but IAST believes
IAST Essential Oil Plant
Operations within the Bio-diesel Plant at IAST
that other construction products can be achieved from these repurposed materials.
analytical services to these sectors can be sourced locally as opposed to going abroad.
The Institute’s analytical services department generates a revenue stream for IAST by utilizing researchgrade equipment to serve local industry. For example, IAST has acquired about 60 percent of the equipment required for testing in the petroleum oil and gas sector, and about 40 percent of the equipment required for analytical services in the mining industry. As these sectors become more prominent, IAST plans to enhance its capabilities so that
In seeking to work more closely with the private sector, the IAST intends to look for greater funding shares from the former through research, technology transfer and analytical services, as well as through longterm industrial collaborations and the commercialization of technologies and demonstration projects developed inhouse. Likewise, the IAST envisions a role as liaison with private industries that
Repairing a laboratory apparatus in the Glass Blowing Workshop at IAST
De-bedding of used tires in the Rubber Recycling Plant at IAST
Compressed earth blocks made by IAST
Steel deck plates from DHB coated with Rubberized Asphalt produced by IAST
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BUSINESS GUYANA - 2012
Biodiesel made from different feed stock
require analytical testing for meeting environmental standards, quality control benchmarks, and safety/ toxicity assurances. In addition, for companies wishing to implement improvements or new processing technology, data-collection, critical control point analysis, efficiencies of process, quality control, and logistics, the IAST offers technology transfer and research consulting services throughout the life cycle of the project. IAST officials explain that staff can source the technology, act as a broker to acquire equipment, install and commission, provide operational training and oversee maintenance and troubleshooting services. The IAST also provides research and product development services in value-added food production (including beverages, nutraceutical formulations and preservation processes), agriculture, the utilization of local materials for the construction industry, agro-energy, and prospecting activities for bioactive compounds in local botanicals along with
IAST fleet of vehicles being powered by Bio-diesel produced from waste vegetable oil.
their incorporation into foods and beverages. The Institute can work under contract – or collaboratively – with companies to develop products from local materials. IAST’s arrangements exemplify the role of consultant for relevant industrial partners, which means that all data, processes, and intellectual property arising out of the contract project work remain solely within the proprietary domain of the industrial partner. Costs usually are represented in hourly rates for the IAST staff time and for use of its facilities. Furthermore, in the collaborative research model, the IAST will share costs of research and development costs on projects identified as of significant national importance which, in turn, also benefits the industrial partner. In this specific case, any forms of intellectual property and data arising would either be shared in the public domain, or would remain within the proprietary domain of the industrial partner, who would have first
right of refusal to purchase intellectual property from the government, either on a non-exclusive or exclusive basis, depending upon the nature of the agreements. In cases where no intellectual property claim has been filed, the industrial partner would benefit directly from the data, developed processes, technology transfer, and learning experiences obtained during the joint project. As the IAST continues to evolve as Guyana’s central research and development institution, it faces the challenge of sufficient access to skilled personnel. Its equipment base was renewed over the past six years but now the emphasis has shifted to training models that will allow the equipment to be operated by teams of skilled personnel. One avenue is a partnership with tertiary higher educational institutions. Agreements have already been signed with the University of Guyana and Canada’s Trent University and relationships are being pursued with other research and learning institutions worldwide.
BUSINESS GUYANA - 2012
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ESSEQUIBO Diverse Opportunities Abound
ever have the possibilities been so inviting. Essequibo, an economic straggler only a few years back, is becoming the new boomtown as diverse opportunities open up and investors rush to take advantage of the enhanced prospects. Essequibo is open for business and many companies already operating there have recognized this and have expanded and modernized their operations giving the economy a jumpstart. New businesses have also sprung up as retailers take advantage of the growing prosperity of the ‘Cinderella County.’
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ESSEQUIBO - DIVERSE OPPORTUNITY
It is only the beginning as many opportunities in the vast, lush lands are yet to be tapped. Whether it is forest products, the rice industry, other crops and livestock, retail, manufacturing, eco-tourism, aqua-culture, entertainment or new industries, the possibilities are vast. The Essequibo Coast is a predominantly rice growing region and a lot of new opportunities are emerging as world market prices are on the upswing and the industry continues to grow. “The rice industry is undergoing a modernization process where the existing mills are being
upgraded or refurbished, putting in new machinery, equipment to do value-added products,” said Dhanpaul Dhanraj an investment officer with the Guyana Office for Investment. “With the demand for food globally and grains in particular, including rice, this has caused an upsurge in the production of paddy as a raw material for processing,” he said. This has created additional demand for processing facilities and while existing mills expand their capacity, in many cases there are limits to where they can go. “So any investor who is interested in setting up a rice milling
BUSINESS GUYANA - 2012 Aerial View of Essequibo River at Bartica.
Islands in the Essequibo River
facility, it would be a good venture for them,” the veteran investment officer added. One of the focus areas is value-added products like parboiled or packaged rice while utilization of the by-products is also being encouraged. Markets are in place with Guyana supplying rice and paddy to Venezuela under a deal that is growing year after year. In addition to the domestic market, Guyana also ships raw and processed rice to Caribbean markets and Europe but is yet to tap into the Brazilian market though a mechanism – the partial scope agreement – is already in place. “It’s just a matter of time. Once our production continues to increase we will be tapping into that market,” Dhanraj said.
energy such as hydropower, solar and wind; Mining-gold, bauxite, sand, quarrying; Information Communication Technology with emphasis on call centres; Tourism – inclusive of hotels, resorts and tour operations; and the Manufacturing and Services sector. “Any investor entering any one of those sectors will be entitled to fiscal incentives, a waiver of duty and taxes on every piece of equipment that is
But rice is only one of the areas that are ripe for investment. Government has enshrined fiscal incentives in the law to encourage investment in eight strategic sectors The eight strategic areas are Agriculture and related areas like aquaculture, agro-processing, forestry, logging, sawmilling, wood processing and other downstream activities; Energy –fossil fuel based or alternative Rice Cultivation
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BUSINESS GUYANA - 2012
necessary to set up an operation or project in any one of those sectors,� Dhanraj said. Essequibo is an ideal location for many lucrative businesses within these sectors given its vast lands, abundance of natural and human resources and port for exports. Vast forests for logging and wood processing, the natural beauty of the land for tourism, large citrus orchards in the Pomeroon with large amounts of fertile land available for increased Bartica Regatta - Essequibo River
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Rice Storage Facilities
BUSINESS GUYANA - 2012
production, untapped opportunities in industries like coconut oil, coconut milk powder and coconut water production both for the local and export market and call centres have been identified as having significant growth potential with a growing number of secondary school and even university graduates providing a ready and trainable labour force. “There’s a great market for manufactured goods and agricultural produce,� said Ryan Vanslytman, an official with the Essequibo Chamber of Commerce and Industry. Land and raw materials are available and once there is a market, farmers can increase production and Essequibo could develop into a large scale agricultural producer and manufacturer. The retail business sector in Essequibo has expanded in recent years but it is still in an infant stage and there is scope for much more growth including providing services inclusive of entertainment which is in great demand. It is becoming easier to take advantage of opportunities with banks opening their doors and providing financial
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services that were not previously available. Export is also easier with the Customs Department maintaining a base in Charity from where goods, destined for Venezuela and the Caribbean pass. Furthermore, Guyana is gaining increased recognition in the international tourism market and the well-known Essequibo lakes are ready for further development with officials saying that facilities for overnight stays are needed since there is none at present. For an investor building a hotel Parika Stelling
with 15 rooms and over, all the building materials, furnishings, appliances, and a suitable type of vehicle would be free of duty and taxes as enshrined in the law, Dhanraj said. Further down the Essequibo, heading towards Bartica the enormous tourism potential in the pristine area has also been recognized. The authorities have spoken about developing a spot close to Bartica for yachts while ecoresorts along the Essequibo River is another area that has already attracted investment but there is scope for more.
BUSINESS GUYANA - 2012 Baganara Island Resort
Bartica and the surrounding areas are also known for gold mining, quarrying, forestry; and, opportunities in these sectors inclusive of providing services are plentiful. The community has grown rapidly because of the gold boom over the past years and now there is demand for practically every type of service in the ‘gateway to the interior.’
Retail shops, banks, transportation and other services have popped up and are in demand. With large mining companies starting operations in the area, the demand for various services will continue to grow. An area that has scarcely been tapped into here is agriculture. Hundreds of
miners heading into the goldfields as well as the swelling population of Bartica take produce from Parika and other locales and transport it to the community at high prices. There is enormous potential for producing these crops as well as livestock and poultry around Bartica and the government has been working towards the
Regatta Activities - Essequibo River
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BUSINESS GUYANA - 2012 Iwokrama Rainforest Centre
allocation of more land for agricultural purposes in the area. “Land is being earmarked and allocated for investors to do agriculture,� Dhanraj said. The opportunities are available for both the local and foreign investors. Once the investment is being made in the
eight strategic areas, both are entitled to the same incentives. It has become easier for non-Guyanese investors to set up businesses here with an investment framework in place that is comparable and even surpasses other countries in the region. A foreign investor, for example, can establish a
company here own all the assets and repatriate funds without restrictions. Essequibo is a choice that many have chosen to make. With its abundant, untapped resources-both natural and human, production base and ready markets, Essequibo is ripe for investment.
BUSINESS GUYANA - 2012
F
or Renger van Dijk, moving his business base as a supplier of heavy-duty equipment to various industries from Suriname to Guyana 20 years ago was not a particularly difficult decision. In Suriname, business had been steadily declining for van Dijk, an engineer who was born in The Netherlands but was raised in the Dutch-speaking nation. Import licenses were difficult to obtain and foreign exchange was limited. However, moving to Guyana in the early 1990s still had its rocky moments for van Dijk, who lost money in the early years, taking a substantial impact from floods that devastated crops and left farmers unable to pay for equipment. “At a certain time I nearly considered cooling out because business was pretty bad,” van Dijk says. “Anyhow I decided to persevere and we are still here and things are much better now than before.” The Dutch-born entrepreneur, who started his first business in Suriname in 1974, is glad he made the move
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INVESTOR’S SPOTLIGHT - GENEQUIP
to Guyana in 1991 and launched his business with three employees. Today, the two companies he founded – General Equipment Guyana Ltd. (Genequip) and Farm Supplies Ltd. (Farmsup) – employ 70 people and
insular tendencies as companies were complacent, unaware of the rapidly evolving technologies for globally produced equipment, and instead focused on selling equipment essentially 20 years behind its time. Meanwhile, van Dijk saw strategic opportunities for getting Guyana’s agricultural sector up to speed in mechanized technology. Genequip introduced advanced equipment that revolutionized the local rice industry and led to increased productivity at lower costs. Today, van Dijk’s businesses supply tractors across Guyana, including the coastal areas, northwest and southern regions, and important industry centers such as Rupununi and Orealla.
supply equipment for agriculture, power generation, forestry and mining. The companies, which account today for about 40 percent of the nation’s market in tractors, significantly helped to transform Guyana’s agricultural sector. In the early 1990s, the country’s agricultural sector was limited by its
“It’s a success story in terms of market acceptance,” van Dijk explains. “John Deere was an unknown manufacturer here. Everything in Guyana at the time was Ford and Massey. The green tractors were unknown. Everybody thought I was a fly-by-night operator who comes here for a short time, makes a few quick bucks and leaves.”
BUSINESS GUYANA - 2012
the authorized distributor of the iconic John Deere tractors. Capitalizing upon his Suriname contacts, van Dijk also secured rights in 1993 as a distributor for Komatsu in Guyana.
However, van Dijk worked quickly to assuage concerns by assuring excellent customer service at all times, regardless of whether business at the time was good or bad. “We want to offer our customers a one-stop shop,” van Dijk says. “We do everything. We sell, install, service and repair.”
the border town of Nickerie and had established contacts in Guyana. “I was selling at a time when nothing was available in Guyana,” he recalls. After hearing that business was improving in Guyana, he began supplying one of his Guyanese contacts with equipment to sell on a commission basis.
Genequip and Farmsup run the gamut, including tractors, ploughs, excavators, sprayers, vehicles, rice mills, combines for sugar cane harvesters, chemicals, and all other equipment and implements as needed. After-sales service also is a priority as evidenced by the nearly 20 mechanics who work on-site and in the field.
However, his contact did not prove to be very reliable so van Dijk traveled more frequently to Guyana to solidify sales. “In the beginning, I lived here two weeks a month while I still ran my business the other two weeks in Suriname,” he explains. By 1991, he was convinced that his primary base of operations would perform better in Guyana. Genequip was incorporated in 1992 and Farmsup the following year.
“You cannot just sell. That is only part of the package,” van Dijk explains, underscoring his holistic approach to a long-lasting relationship with customers. Business continues to expand, with satellite dealerships planned for Essequibo and Berbice. The repair and fabrication workshops also are being extended.
At the outset, the company’s sole employees were the late Roy Jones, who was an estate manager with Guysuco; mechanic Kenneth Sumner and van Dijk. They sold equipment and implements made in Brazil and became
Genequip’s first operations base in Guyana was a leased building on Water Street but within two years, the company outgrew its headquarters and leased a plot of land at Houston, East Bank Demerara. Three years later, the rapidly expanding company yet needed more space resulting in the purchase of two and a half acres of land at McDoom where it is presently situated. “We need more land again. We’re growing and are running out of space again,” van Dijk adds. Twenty years after settling in Guyana, van Dijk looks warmly upon the solid relationships he has established with customers, business colleagues, and community leaders. “I think my proudest moment up to now is I think that we are being seen in the agriculture community as a number one supplier of equipment,” he explains. “We have an excellent reputation. We give good service, offer spare parts and we employ and train mechanics. And above all, we don’t walk away from our obligations which are what our company stands for.” And, further underscoring his deep appreciation for the community that has supported his businesses, van Dijk says the 20th anniversary of Genequip will be marked by special events for his customers, charity contributions, and the planting of mangroves.
It was not always an easy road for van Dijk. After his childhood years, he returned to the Netherlands to qualify as a mechanical engineer and came back to Suriname in 1965 when he was 21. Initially he worked for companies involved in supplying agriculture and construction equipment before starting his own business nearly a decade later. The business thrived but experienced a downturn amid the faltering Surinamese economy in the mid-1980s. At the time, van Dijk worked from
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INVESTOR’S SPOTLIGHT - GUYANA GOLD FIELDS
BUSINESS GUYANA - 2012
Guyana Goldfields Investing in a Golden Economy
G
uyana Goldfields Inc. is a Canadian-based junior company with offices in Toronto, Canada and Georgetown, Guyana. Its primary focus is on the exploration and development of gold deposits in the well-known Guiana Shield of South America. The Company holds advanced exploration projects in various stages of development and has been operating in Guyana continuously since 1996. Throughout the past 16 years, the Company acquired various land packages within the prolific northwest region of Guyana and has been exploring for gold. After many years of exploration and a large capital injection, the Company made a discovery at its Aurora Property in 2004. Since then, a total of over 363 kms of drilling and 1,323 holes have been completed which have confirmed a current measured & indicated resource of 5.71 million ounces of gold. Development of the Aurora mine is expected to commence in mid–2012
after the completion of the Feasibility Study. Construction of the mine is expected to take approximately 24 months and first commercial gold production from the Aurora mine is expected in late 2014.
T h e mine is expected to have a positive impact on the economy of Guyana by maximizing
employment, skills training, and generating business opportunities for local suppliers and service providers. Guyana Goldfields is dedicated to becoming the leading corporate citizen and a productive partner in the future of Guyana’s economy. The Aurora Project is presently the only large-scale mine development project in Guyana and will be the next producing mine in the country since the closure of the Omai gold mine. The Company remains committed to the highest social and environmental responsibility standards and continues to work with the Guyanese Government and local communities in those aspects. The Company has also been working with the International Finance Corporation (IFC) of the World Bank Group since 2006 and is following recognized international social, environmental, health, and safety standards. As the Company has grown towards the ranks of becoming a developer and eventually a producer, it has increased its initiatives in Corporate Social
Mining Camp
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BUSINESS GUYANA - 2012
Responsibility (CSR) and Sustainability. From the inception, the company has a long history of being a great corporate citizen. Its Corporate Social Responsibility mandate is based on three (3) pillars. They are Human Resources Development; Health, Safety and Environment (HSE) and Community and National Initiatives. Each pillar contributes significantly to sustainable development for the Company and ultimately for the country of Guyana as a whole. As a result of following international standards, Guyana Goldfields was awarded a Mineral Agreement and its main Mining License in November 2011 in order to build and operate the mine. This extremely important milestone considerably de-risked the project since it allows the advancement of the mine development and operation under a clear and stable fiscal and royalty regime. This historic
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landmark agreement for the Company and Guyana, which strikes a fair and reasonable balance of taxation and royalties for gold mining, sets
the stage for future large scale gold mining operations and reaffirms the Company’s view that Guyana is “open for business�.
BUSINESS GUYANA - 2012
INVESTOR’S SPOTLIGHT - AMCAR
AMCAR’S Organic Hearts of Palm “The Pride of the Region”
A
mazon Caribbean Guyana Ltd (AMCAR), established in Guyana since January 1986, is an internationally certified organic agro-processing company. The company’s main product, the Heart of Palm (euterpe oleracea) is popular throughout Central and South America and is abundantly available in Guyana’s rich tropical forests. It is known as Palmito in Spanish, Coeur de Palmier in French or simply ‘cabbage’ to the locals. AMCAR’s Heart of Palm has been certified organic by Eco Cert International since 1992, and its pineapples have been certified organic by Eco Cert since 2004. The Company sought higher recognition and obtained its first certification from the International Featured Standard (IFS) in 2010 to meet international requirements in quality and security management in order to retain and increase export market shares. This certification guarantees the final consumer that AMCAR is following procedures to ensure high quality, proper sustainability of the raw product and process under the strictest hygienic conditions and responsible management.
How it all started… After discovering the economic viability of this delicious naturally grown plant, the company opened its first factory twenty six (26) years ago in the North
West District, Region 1, approximately sixty (60) miles up the Barima River in the heart of the biggest reserve of Manicole Palm in Guyana. Hence, the plant is harvested and transported to the factory for processing while maintaining its organic properties. The company started exporting in 1987. The product was well received and demand grew constantly allowing the Company to move from pioneers processing in a cauldron to agroprocessors processing in steam retorts and semi automatic seamers. By 1996 the need for a second factory led to the construction of a state of the art factory in Region Five (5) Rosignol in 1998. By the end of the 1990s AMCAR was exporting almost 100 containers of canned Heart of Palm per year.
With the intention to capitalise on its experience and export network, AMCAR has been constantly looking to develop new value added products from locally grown produce specifically produce that are 100% organic. This materialised into a community-based partnership with Mainstay/ Whyaka, Essequibo, where pineapples were grown in a way compatible with organic procedures. After organic certification of the pineapple fields, a third factory was built in the village of Mainstay/Whyaka. The community has benefitted from employment and improved farming practices through the company’s collaboration with the Ministry of Agriculture and the National Agriculture Research Institute in Guyana. The Mainstay pineapple
Managing Director: Christophe Sureau, General Manager Production: George Uthandi and Chief Executive Officer: JF Gerin with the employees of the North West factory
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BUSINESS GUYANA - 2012
organic food industry, brings a plus in front of the competition internationally and contributes firmly to planting its feet in this niche market. Carrefour, the second largest hypermarket in the world is among its customers. These accomplishments have allowed AMCAR to be invited to participate in established Trade Fairs globally. In 2011, AMCAR participated in Guyana’s premier trade fair ‘GuyExpo’ and also the Trade and Investment Convention in Trinidad. Amazon Caribbean and Guyana were represented at Anuga Cologne-Germany, one of the biggest organic trade-fair in the world, and in SIAL Paris-France, the biggest food show in Europe. These platforms were also used to promote the many opportunities available for investmentrelated activities in Guyana.
is now recognised by European consumers who can find canned pineapple on the supermarket shelves and enjoy its unmatched taste. Today, the Company is continuing on its developmental progress by seeking further collaboration with the Government of Guyana and International Organisations through financial and technical assistance to execute upcoming projects such as Manicole Farming within communities. The Directors, Christophe Sureau and Olivier Sureau, its Chief Executive Officer, Jean Francois Gerin, and AMCAR’s team have developed an extensive work programme to achieve the objectives encompassed in their vision of a sustainable future for AMCAR and the people of Guyana.
Always an environmentally responsible corporate citizen, Amazon Caribbean partners with the Guyana Forestry Commission to execute its Forest Management Plan, which particularly promotes correct harvesting practices of manicole to prevent environmental degradation; and it works in line with the Low Carbon Development Strategy (LCDS) for sustainably managing and ensuring naturally generated manicole palms. Acknowledging that there is really no substitute for first-hand interaction with leaders in other sectors, whether friends or critics, the Company is ever aware of its corporate stakeholders’
responsibility. Historically speaking, Amazon Caribbean has always contributed to the development of communities, particularly within the hinterland region. Through partnership with communities, schools were built, educational programmes and scholarships were launched and supported, and just recently, AMCAR has co-sponsored the Children’s Mashramani competition for the Santa Rosa Secondary School. However, the Company is not without its many challenges such as the high
cost of capital investment, constantly competing with the labour sector in the hinterland areas and the difficulties of recruiting experienced and qualified individuals in the food processing sector. Nevertheless, AMCAR, motivated by the students of the Santa Rosa Secondary School depicting the processing of Heart of Palm as ‘the pride of the region’, intends to continue for another quarter century its legacy of exporting a high quality value added product from Guyana.
Conscious that certification such as IFS is paramount and becoming compulsory for exportation, the work programme has been developed to tackle employees’ technical educational enhancement, community farming expansion and modernisation of equipment for improved food processing techniques. AMCAR’s team is convinced that being tested 100% organic allows the company to be a major player in the
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BUSINESS GUYANA - 2012
NEXT LEVEL - GUYANA’S MARITIME INDUSTRY
Taking Guyana’s Maritime Industry to the Next Level
G
uyana is poised to reap major benefits from increasing shipping trade, especially with Brazil, which sees the nation’s maritime corridors as the fastest, most costeffective way of reaching the Atlantic.
Georgetown and the Demerara Harbour will require upgrades in navigational aids, security, cargo processing, and infrastructure improvements including dredging in order to handle vessels with larger cargo capacities.
and security provisions in the maritime industry meet, if not exceed, stringent safety and environmental standards, procedures and regulations as generally accepted in the global maritime economy.
However, the country also will need to expand significantly its maritime transportation infrastructure in order to handle a huge uptick in international containerized shipping trade along with rapidly growing industries in energy production and raw resources, minerals, and metals.
Other proposals target building inland trans-shipment bulk terminals to handle documentation and cargo in facilities surrounding the new Takatu River Bridge in Lethem between the borders of Guyana and Brazil. Industry experts also have called for Guyana to build up its fleet of service vehicles for shipping, dredging, maintenance, repair, and other routine maritime functions.
These proposals are below in more detail:
With this in mind, the Shipping Association of Guyana (SAG) has outlined a few proposals for the upgrading of the maritime industry and which include a new intermodal transportation hub that seamlessly connects major towns and cities in Brazil’s northern landlocked states to Guyana’s coastal cities as well as a deep-water harbour at the mouth of the Berbice River. Likewise, Port
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By Clinton Williams
In addition, industry experts believe diversifying and accelerating vocational training programmes for specialised maritime occupations are essential activities if Guyana expects to move successfully its maritime industry to the next level. Furthermore, Guyana will need to ensure that safety
summarised
Brazilian Trade Many experts readily agree that the recently completed Takatu Bridge in Lethem will bring a major increase in cross-border transshipment trade. The Guyanese government already has allocated an 80-acre parcel of land in Lethem for constructing shipping facilities. Yet, there are other factors that signal Brazil’s growing interest in utilising Guyana’s shipping corridors especially in moving and trading goods involving the northern land-locked states of
BUSINESS GUYANA - 2012 Takutu River Bridge
Amazonia, Para and Roraima. Siltation in the Amazon River between Manaus and Belem, where sediments have accumulated to levels hampering the efficiency of movement in navigation channels, has resulted in substantially increased freight costs and transit times for Northern Brazilian exporters. Industry experts have identified a couple of options within the larger project of establishing an efficient, costeffective intermodal transportation system that would link Manaus to Lethem and then to the Guyana coast, either in Georgetown or New Amsterdam. One option that would resolve these specific trans-shipment issues would be to build a rail and/or road network and to determine whether a proposed deep-water harbour at the mouth of the Berbice River will become the central shipping hub for connecting Guyana to the Atlantic. A second option would be a state-of-theindustry Demerara port, supplemented by a multimodal transportation network with rail and barge links.
Port Georgetown and Demerara Harbour Improvements Even as various options are being explored for strengthening Guyana’s maritime infrastructure, Port Georgetown remains the key port for all of Guyana’s containerized exports and imports, as well as most of the nation’s break bulk and project cargo imports. SAG officials believe Guyana should adopt the use of gearless vessels and shore cranes, which have been shown internationally to increase vessel
efficiency, an essential prerequisite for attracting joint venture partners from around the world. In addition, SAG has recommended establishing a central terminal on the Demerara West Bank to meet the anticipated demand for container storage space, resulting from increased shipping trade with Brazil and others. However, existing conditions in Demerara Harbour also threaten to limit the potential for growing maritime trade. As in Suriname, Guyana primarily is serviced by smaller feeder vessels and general cargo ships, mainly because of severe draft restrictions in the ships’ access channels that have, for years, been hampered by heavy siltation arising from the Amazon River outflows. Experts agree that dredging would be the most feasible, immediate solution to mitigate the effects of siltation. For many years, the baseline level was six metres but in the 2008-2011, the level dropped rapidly to approximately four metres. As a result, the cargo capacity
of vessels transiting the harbor has been reduced to between 60 and 70 percent of previous levels and has translated to higher freight rates (based on an annual average throughput of between 55,000 to 60,000 Twenty foot Equivalent Units (TEU) of cargo passing through the port). More plainly, the maritime owners/operators usually provide for revenues from full loads – cargo plus dead-freight – in all voyages but these higher rates at reduced capacity ultimately translate into higher prices for the individual consumer. Dredging the Demerara navigational channels to an acceptable depth would help reverse the trend and maximize throughput. Likewise, replacing navigational aids and accompanying infrastructure, and expanding services, including port security measures, would further reinforce the cost-effective benefits of utilising the harbour. The issue of security cannot be underestimated. In the aftermath of the 2001 terrorist attacks in the United States, the International Ship and Port
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BUSINESS GUYANA - 2012 Cruise Ship in Port Georgetown
Facility Security Code (ISPS) was implemented in 2004 to standardise the roles and responsibilities concerning maritime security for governments, local administrations, and ship and port industries at the national and international level. To that end, SAG has endorsed establishing a special body involving representatives of SAG, the government’s Maritime Administration Department (MARAD), Guyana Defence Force Coast Guard, the Fire Service, and police authorities to enforce ISPS regulations. The proposal recommends that MARAD would continue to interact with entities including the International Maritime Organization and the patrol units of the U.S. Coast Guard.
Emerging Energy and Raw Resources Industries Even absent of the potential for increasing shipping trade with Brazil and other international partners, Guyana’s maritime infrastructure will have to be upgraded significantly to meet the immediate demands of a whole host of emerging industries in the energy and raw materials and processing sectors. These include oil and gas, manganese and uranium as well as gold, bauxite and quarrying.
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Among the most urgent needs will be suitable vessels such as supply crafts, barges, tugs and crewing boats that can service oil rigs and move raw materials and other resources from the point of production to the place of export. Equally critical is the need to diversify and accelerate the capacity for hiring and training workers who can be certified and licensed as port operators, seafarers, mechanical equipment operators as well as others with the requisite ancillary skill sets that qualify employees for these specialized industry sectors. In addition, bulk terminals and handling facilities customized to handle these types of cargo will be required. This would include implementation of a Single Window Automated Processing System (SWAPS) to reduce significantly trade transaction time and costs.
countries such as Barbados, St. Lucia and Antigua also have created skill development programmes via distance learning by piggybacking upon the resources of the Caribbean Maritime Institute in Jamaica, an initiative that SAG officials believe Guyana can readily adapt. Thus, SAG is seeking to build partnerships with industry sector members as well as the Council for Technical Vocational Education and Training (TVET) in determining the relevant skill needs, devising the course content for programmes, and identifying and utilizing all available facilities and professionals to deliver instruction and administering the essential occupational competency assessments and certification.
Maritime Training Facilities SAG also has recommended that Guyana join other countries in the Caribbean region by establishing facilities dedicated to training prospective workers and organisations in skills specific to the international maritime industry. As with Trinidad and Tobago, Suriname, and Jamaica, Guyana should move to secure bilateral partnership agreements with developed countries including Norway, Sweden and Canada. Other
Clinton Williams Director - Guyana National Industrial Company Inc.
BUDGET REVIEW
BUSINESS GUYANA - 2012
Finance Minister, Dr Ashni Singh Presenting 2012 National Budget
National Budget 2011 FACTS
• • • • • • • • • • •
Growth in Real GDP of 5.4 %. Balance of Payments Deficit of US$ 15 Million. Inflation Rate of 3.3 %. External Debt of US$ 1.2 Billion. Current Revenue of US$ 120.9 Billion. Exports of US$ 1.1 Billion. Imports of US$ 1.8 Billion. Current Account Deficit of US$ 373 Million. Net Inflows on the Capital Account of US$ 373.2 Million. Average Prime Lending Rate at 11.68 %. Small Savings Rate of 1.99 %.
2012 TARGETS & ALLOCATIONS • • • • • • • •
Size of the Budget G$ 171.97 Billion. Projected Growth in Real GDP of 4.1 %. Inflation Rate is targeted at 4.6 %. Growth in Capital Account to US$ 462 Million. Balance of Payment Surplus of US$ 136.3 Million. Current Revenue Projected at G$ 146.9 Billion. Current Non Internal Expenditure of G$ 107.1 Billion. Capital Expenditure of G$ 75.8 Billion.
• • • • • •
Financial Deficit of G$ 30.5 Billion; to be financed by G$ 22.8 Billion in External Burrowing & G$ 7.7 Billion from Domestic Sources. G$4 Billion Subsidies to Guyana Sugar Corporation. G$5 Billion Subsidies To Guyana Power & Light (G P L) Increase in Old Age Pension to G$ 10,000. Increase in Public Assistance to G$ 5,900. Income Tax Allowance Increase to G$ 600,000 annually; G$ 50,000 monthly.
ALLOCATIONS BY SECTORS & INDUSTRIES ICT • G$ 6.58 Billion for Installation of the High Speed Fibre Optic Network from Lethem to Providence and the One Laptop for Family Programme. Agriculture • G$ 1 Billion for Agriculture Sector. Tourism • G$ 200 Million to Tourism.
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BUSINESS GUYANA - 2012
Small Businesses • G$ 22 Million to Small Business Bureau. • US$ 1.7 Million for implementation of Small Business Development Fund. Physical Infrastructure • G$ 11.8 Billion for Roads & Bridges. • G$ 4.5 Billion for Upgrade & Expansion of CJIA. • G$ 180 Million for Rehabilitation & Maintenance of Airstrips across the Country. • G$ 717 Million for Docking Rehabilitation of Maritime Vessels & Acquisition of Spares. • G$ 2.9 Billion for Sea & River Defense Works. • G$ 7.8 Billion for National Drainage & Irrigation System. • G$ 391 Million for Modernization of Hydro Meteorological Network. • G$ 1.8 Billion for Installation of Submarine Cable Linking & Upgrade & Construction of Several Electrical Sub – Stations. • G$ 50 Million for Design of Hydropower Project at Kato. Education • G$ 26.5 Billion to Education Sector. Health • G$ 16.9 Billion for Health Sector. Housing • G$ 3.6 Billion for Housing Sector. Water • $ 2 Billion for Water Sector.
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Security • G$ 16.2 Billion for Security Sector. Justice Reform • G$ 2.1 Billion Allocated.
BUSINESS GUYANA - 2012
SECTORAL PERFORMANCE IN 2011 & TARGETED PERFORMANCE IN 2012 Performance In 2011 %
Targeted Performance In 2012 %
Agriculture, Fishing & Forestry Sugar Rice Other Crops Livestock Fishing Forestry
2.7 7.1 11.0 5.7 5.8 (5.3) (9.3)
2.7 5.7 2.6 4.0 4.9 5.0 (8.2)
Mining & Quarrying Bauxite Gold Other
19.2 38.0 17.7 (81.9)
1.8 (0.2) 2.9 (1.2)
Manufacturing Sugar Rice Other Manufacturing
6.8 7.1 11.3 4.9
3.9 5.7 2.6 4.0
Electricity & Water Construction Wholesale & Retail Trade Transportation & Storage Information & Communication Financial & Insurance Activities Public Administration Education Health & Social Services Real Estate Activities Other Service Activities
2.1 2.8 4.5 14.2 1.5 9.7 0.6 6.7 3.8 1.6 0.5
3.5 6.3 6.5 9.5 3.0 8.0 1.8 5.7 2.0 0.5
INDUSTRY
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Guyana An Investor’s Guide EXCLUSION OF LIABILITY & DISCLAIMER Neither in the text nor in any note in this publication, is Ram & McRae offering any professional or legal advice. While every effort has been made to ensure that the contents of this publication are accurate, Ram & McRae shall not be liable to any person or entity for any loss or damage caused or alleged to be caused directly or indirectly by use of any information or any error contained in this publication. For specific professional advice, please contact us.
Presented by:
Ram & McRae Chartered Accountants Professional Service Firm 157 ‘C’ Waterloo Street, Georgetown, Guyana Telephone: 592 226 1072 / 226 1301 / 226 0322 Facsimile: 592 225 4221 Email: info@ramandmcrae.com Website: www.ramandmcrae.com
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RAM & McRAE Chartered Accountants Professional Service Firm
In 2010 Ram & McRae marked its 25th Anniversary and in the period since its inception the Firm has consistently worked to live up to its Mission Statement “To meet the needs of our clients with services of exceptional quality and value, and to build on the reputation of the Profession for independence, integrity and innovation while fulfilling the aspirations of our staff and partners”. Our services include Accounting, Audit and Review, Tax Compliance, Planning and Strategies, Payroll, Information Technology, Business Planning, Management Consultancy including Valuation and Corporate Services.
Our Partners Christopher L. Ram - Managing Partner Mr. Ram is a Chartered Accountant and a practising Attorney-at-law. responsibility for Tax Compliance, Planning and Strategies.
He has direct
Robert V. McRae, CPA, BSc., FLMI Mr. McRae also practises as a Certified Public Accountant in New York. Rakesh V. Latchana, FCCA In addition to having direct responsibility for Information Technology and Audit Services, Mr. Latchana is Chief Executive Officer. The Partners are supported by a team of over thirty professional, semi-professional and administrative staff dedicated to delivering services that exceed our clients’ expectation.
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T
Introduction
he information contained in this section is prepared by Ram & McRae, Chartered Accountants, to provide companies and businesspersons, both domestic and foreign, with a general overview of business practices in Guyana. It is intended to provide information to assist those persons to understand the business environment in Guyana, without making any specific recommendations on their choice of National Insurance Scheme Building
business activity or mode of operation. Any laws or regulations referred to are subject to change without notice. We have taken great care to ensure the accuracy of the information but since this represents a summary only it should not be considered an authoritative statement of any specific matters of law. To avoid any pitfalls but more especially to take maximum advantage of the opportunities offered
by this developing economy, readers are advised to contact the firm for specific professional advice. . While the country’s tax laws are not particularly complex, they offer several opportunities to the investor. However, if tax planning is not done within the law the legislation and on the basis of sound professional advice, the tax authorities can set the transaction aside.
Demerara Mutal Life Insurance
Overhead View of Main Street.
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BUSINESS GUYANA - ISSUE # 3, 2012
The Country
primarily based on agriculture, ecotourism, forestry, fishery and mining in bauxite, gold and diamonds. Efforts continue to promote non-traditional agricultural produce and aquaculture, and a number of companies have begun exploration for oil and gas. Under a Low Carbon Development Strategy (LCDS) being promoted by the Government of Guyana, the economy will offer lucrative opportunities for businesses in new and expanding sectors that pursue environmentally friendly activities.
Parliament Buildings
G
uyana is a former British colony which gained independence in 1966 and became a Republic within the Commonwealth in 1970. Its judicial system and legal practices reflect the country’s English Common Law origin and modified Westminster’s system of government. Bordered by Suriname, Venezuela and Brazil, Guyana is a founder member of the Caribbean Community (CARICOM) and home of its Secretariat. The country enjoys the unique position of being the only English speaking country in South America and there are lucrative trading and investment opportunities with northern Brazil. Ninety percent of the multi-ethnic, multi-cultural population of just over three quarter million people lives on the coastal strip while the interior or the hinterland regions are inhabited mainly by the country’s indigenous people who are guaranteed special protection under the country’s constitution including title to lands and their culture. With access to the CARICOM market under the Caribbean Single Market and Economy and as a beneficiary under the Caribbean Basin Initiative (CBI), many of the country’s products gain preferential treatment into the US and enjoy duty-free treatment under
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the Generalised System of Preferences (GSP). Special access arrangements are also in place to the huge European Market under the Economic Partnership Agreement (EPA), to Canada through CARIBCAN, and to other countries through bilateral agreements.
To confirm its commitment to fostering a favourable environment for growth and creating opportunities by improving its political climate, maintaining a stable macroeconomic environment, modernising the traditional growth sectors and rehabilitating and expanding the physical and social infrastructure, the Government in 2004 passed the Investment Act setting out the incentives and guarantees to both foreign and domestic investors.
Guyana lies within the equatorial trough zone and the seasons are determined mainly by the variation in rainfall patterns. In the Coastal Zone, there are traditionally two wet seasons from May to July and from November to January and two dry seasons from February to April and August to October.
The Investment Act deems a resident as including a resident of Caricom and Guyana has signed on to the revised Treaty of Chagauramas and the CSME creating a single economic space and providing for the eventual free movement of goods, services, capital and persons.
The mainly liberalised economy is Housing Construction - East Bank Demerara
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FOR FURNITURE THAT SUITS YOUR STYLE.
The Economy
R
eal GDP growth during 2011 was 5.4% bringing recorded average annual real growth of 4.4 percent over the past five years – considerably better than any other Caribbean country. Non-traditional sectors including Transportation and Storage (growth of 14.2% in 2011), Financial and Insurance Activities (9.7%) and Education (6.7%) supported the traditional sectors of sugar (7.1%),
rice (11.0%), bauxite (38%) and gold (17.7%) in generating another year of real GDP growth.
and industries and the government has already indicated its willingness to support such initiatives.
The country has taken a lead role in responding to climate change and its new Low Carbon Development Strategy (LCDS) constitutes a new economic paradigm of development. This Strategy opens a wide range of business opportunities in new sectors
This strategy is expected to pay significant dividends over the next few years. The country is expected to receive US$70M under the pioneering Guyana REDD+ Investment Fund (GRIF) and a minimum of US$250M over a five year period.
Establishing A Legal Presence In Guyana
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decision to do business in Guyana will require the investor to consider the appropriate form of the business unit from both a legal and tax standpoint. The tax laws generally favour the corporate form rather than the unincorporated entity. If the investor is a corporate entity
established in another jurisdiction the issue will be whether to incorporate a new company or register as an external company. Guyanese investors have the option of incorporation, partnership or sole traders. The latter two do not constitute a separate legal entity under the laws of Guyana but are
registered under the Business Names (Registration) Act. Companies are governed by the Canadian-style 1991 Companies Act, which replaced the previous Act that followed the British legal system.
Constituting under the Companies Act 1991
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Incorporation
Registration
Incorporation is effected when one or more persons or entities or a combination thereof agree to form a company in Guyana by filing Articles of Incorporation and, optionally, By–Laws. On the issue to it of a Certificate of Incorporation, the company becomes a legal entity in the eyes of the law.
Registration is effected where a company incorporated outside of Guyana chooses not to incorporate locally but to register as an external company under the Companies Act by filing with the Registrar of Companies a statement containing specified information about the company.
Registration does not create a separate legal entity but effectively only provides legal recognition of the company in Guyana, giving it a right to sue in the courts of Guyana. Duties on both a fixed and ad valorem basis are payable on incorporation or registration.
New Building Society Corporate Head Office Building
Banking & Financing The banking and financial system consists of: the Central Bank; commercial banks; trust companies; a merchant bank; a building society; insurance companies; credit unions; bank and non-bank cambios. Bank of Guyana The Bank of Guyana is the Central Bank for the country. Its primary purpose is to formulate and implement monetary policy so as to achieve and maintain price stability. It also has exclusive powers and duties to regulate financial businesses operating in Guyana. Commercial Banks Commercial banks make up over 70% of the assets of the financial system. There are six commercial banks operating in Guyana. These are: Republic Bank (Guyana) Limited (RBGL) owned by Republic Bank Limited of Trinidad and Tobago; three indigenous banks - Guyana Bank for Trade and Industry (GBTI), Demerara
Bank Limited, Citizens Bank (Guyana) Limited - and the internationally-owned Bank of Baroda (India) and the Bank of Nova Scotia (Canada). The Government has extended to Commercial banks the incentives available to Building Societies offering comparable rates for low-income housing loans. Trust Companies Trust companies (5% of the financial system assets) can only accept term (time) deposits. Generally they offer, among other services, mortgage financing, trust management, trade financing, pension fund investment and brokerage services. Merchant Banking There is only one merchant bank in Guyana – the Guyana Americas Merchant Bank, formerly Guyana Finance Corporation Limited. The
Company provides the following financial services: securities brokerage, securities issuance, investment advisory, investment management, corporate advisory, financial restructuring, mergers and acquisition, project advisory and public sector advisory services. Building Societies There is only one building society in Guyana - the New Building Society, with its head office in Georgetown and branches in several Regions of the country. Its major activity is the provision of mortgage financing for residential properties. Insurance Companies There are thirteen (12) insurance companies (including several related companies) with the majority of them being local companies offering either life or general insurance. Three groups of companies dominate the sector. All of the insurance companies are privately
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owned and the state’s involvement in the sector is confined to the National Insurance Scheme. Insurance companies and pension funds are regulated under the Insurance Act 1998.
with which payments for commodity imports and invisibles are made once the required amount of foreign currency is available. Residents and non-residents can access the cambio market.
Cambios and Foreign Currency
Securities Markets
Bank and non-bank cambios easily facilitate the conversion of foreign currency. Cambios facilitate the ease
Guyana Association of Securities Companies and Intermediaries (GASCI) is a Self-Regulatory
Organisation registered with the Guyana Securities Council to carry on business as a stock exchange and an association of securities companies and intermediaries. Currently there are fourteen companies on the Stock Exchange and trading occurs on Monday of each week. Trading has largely been confined to equity but the law allows for debt stock to be raised on the Stock Exchange after approval from the Guyana Securities Council.
Liability to Tax Customs & Excise Building
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ncome of individuals is subject to tax under the Income Tax Act. The income of companies - defined as corporate or unincorporated bodies, and including branches of foreign companies - is taxed under the Corporation Tax Act. In addition, all taxpayers may be liable to Property Tax and Capital Gains Tax. Resident individuals and companies are subject to tax on the world income basis. However, in the case of individuals who have earned income arising outside of Guyana, only that portion that is received in Guyana is subject to tax. A non-resident person or corporation carrying on trade or business is only liable to tax on income derived from Guyana regardless of where the income is received. A temporary resident individual or corporation is not liable to tax on income arising abroad whether received in Guyana or not.
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Excise Tax and Value-Added Tax The Excise Tax (ET) and Value Added Tax (VAT) became effective on January 1, 2007. The ET and VAT replaced the Consumption Tax, Hotel Tax, Purchase Tax, Telephone Tax, Service Tax, and Entertainment Tax. VAT at the rate of 16% is charged on all goods and services whether imported or manufactured locally, except where the goods and services are zero-rated or exempted under the VAT Act. Excise Tax is imposed on specific imported or home-produced goods. These are Petroleum products, Tobacco products, Alcoholic beverages, and Motor vehicles. Individual Income Tax Income is defined in the Income Tax Act as any gains or profits from any trade, business, profession or vocation for whatever period of time it may
have been carried on or exercised in Guyana. Individuals are taxed at the rate of 33% on income in excess of $600,000 per annum or $50,000 per month. Individuals who are employed pay taxes by payroll deduction on the pay as you earn (PAYE) basis. Selfemployed individuals must pay taxes quarterly in advance on the first day of April, July and October and December 31 of each year. Any balance due after the determination of the final liability is payable on or before April 30 in the following year. Corporation Tax All companies and branches of foreign companies are subject to tax on the income reported in the company’s financial statements prepared in accordance with International Financial Reporting Standards, subject to certain adjustments required under the tax laws.
resident individuals are exempt from tax. A final withholding tax of twenty percent (20%) is imposed on dividends and other ‘payments’ to non-resident companies and individuals. The standard rate is however subject to the provisions of Double Taxation Treaties with CARICOM states, Canada and the United Kingdom.
V.A.T Office, Georgetown
The tax laws also allow for the unilateral relief for foreign taxes paid in countries with tax systems and legislation similar to those in Guyana.
The rate of tax for commercial companies (see definition below) is forty percent (40%) and for noncommercial thirty percent (30%). Telephone companies are taxed at the rate of forty-five percent (45%). Where the taxes payable by a commercial company for any year is less than two percent of its turnover, minimum corporation tax of 2% of turnover is payable. MCT is recoverable in those subsequent years when the taxes payable are greater than 2% of turnover. A commercial company is defined as ‘a company that derives at least seventyfive percent (75%) of its gross income from goods not manufactured by it or if it is engaged in telecommunication, banking or insurance other than longterm insurance’.
The principles of deductibility are generally similar to those which apply in North America and the United Kingdom. Deductions for administrative, technical, professional or other managerial service fees paid to a non-resident company or branch referred to in the Act as “head office expenses” may not exceed one percent (1%) of annual turnover. Charitable donations are not deductible unless these are made under a deed of covenant. Dividends paid by resident companies to other resident companies and to
Corporation Tax is payable in advance quarterly instalments on the preceding year’s tax liability. Advance tax payments are due on the 15th of March, June, September and December of the calendar year prior to the tax year. However, the Commissioner of Inland Revenue may require the company to calculate the payments based on estimated income for the current year. Tax returns must be filed and any balance of tax due, paid by April 30 of the tax year. Failure to comply incurs a further charge of forty-five percent (45%) on chargeable income for the first year and fifty percent (50%) thereafter. Property Tax Resident individuals and companies and non-residents with net property
New Ashmins Mall, Georgetown
Losses may be carried forward indefinitely to be recovered in future years profits. The loss recovered in any one year may not reduce the tax payable by more than fifty percent (50%) or, in the case of commercial companies, to less than 2% of turnover. The tax laws do not allow for loss carry backs. The Act allows for tax purposes the deductibility of all expenses of a revenue nature wholly and exclusively incurred in the production of income.
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in Guyana who own property as defined in the law are liable to Property Tax. Property includes tangible and intangible property, cash, receivables and other rights. Liabilities are deducted from the amount of property and the tax is payable on April 30 at the specified rate. The rates of Property Tax in the case of companies range from zero percent on the first $1.5M of net property to 0.75% on properties in excess of $7.5M (individuals: $7.5M and $12.5M respectively). The filing and payment deadline for property taxes is April 30 of the following tax year. Non-compliance results in penalties similar to those applicable to corporation tax and income tax. Capital Gains Tax Capital Gains Tax at the rate of 20% is payable on the net chargeable gains on the disposal of capital assets. Gains derived on capital assets acquired and disposed within twelve (12) months are taxed as ordinary income. Gains derived from the disposal of assets held for more than twenty-five years or on the transfer of shares or stock held in a public company are exempt. Penalties and interest Failure to comply with the tax laws including the filing of returns, to pay
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taxes on or before the due dates, to make a false return and to deduct and pay over employee and withholding taxes carry significant penalties and interest. BOOKS AND RECORDS Under the Companies and Tax Acts, adequate accounting records to give a true and fair view of the state of the entity’s affairs are to be maintained. For companies, registers must be kept for Share and Debenture Holders, Directors and Officers along with minutes of meetings and resolutions of Directors and Shareholders. All companies incorporated under the Companies Act 1991 are required to file with their annual tax returns financial statements which must comply with International Financial Reporting Standards and the Act, and be accompanied by an audit report issued by a practising member of the Institute of Chartered Accountants of Guyana (ICAG). FISCAL INCENTIVES The Guyana’s Constitution recognises and protects private property and provides for the payment of prompt and adequate compensation, including interest. On the request of the private sector, in 2004 the Government of Guyana passed the Investment Act to re-inforce the Income Tax (In Aid of Industry) Act, the principal incentive legislation.
The Investment Act 2004 codifies the incentives available to foreign and domestic investors. Certain investments in identified sectors and in particular regions will almost automatically qualify for tax holidays for up to 10 years, while certain types of activities will benefit from a range of fiscal concessions. Fiscal incentives include: •
Tax holidays;
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Waivers of import duty on specified machinery, equipment and raw materials;
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Certain goods and services are completely exempt from Value Added Tax while a whole range are taxed at a zero rate, including output of companies operating under an investment agreement entered into with the Government;
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Generous capital allowances under the Income Tax (In Aid of Industry) Act to certain key trades and businesses. These are in addition to the normal wear and tear allowances given for tax purposes.
To enhance the application and approval process, the investment promotion agency, the Guyana Office for Investment (GOINVEST), has been given wide powers and charged with facilitating new domestic and foreign investments that are consistent with the country’s development thrust.
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Investment guarantees All investors in Guyana are guaranteed the full protection of the Constitution and the Investment Act. In this regard, Guyana is a signatory to the International Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID) and to the Multilateral Investment Guarantee Agreement (MIGA). In addition, Guyana qualifies for insurance of United States investments in accordance with the scheme operated by the Overseas Private Investment Corporation (OPIC). WORK PERMITS The laws of Guyana require that nationals of certain countries hold a visa permitting them entry into Guyana. On the other hand the nationals of CARICOM countries falling within certain professional groups or holding a skills certificate under the CSME enjoy certain privileges. Foreign Nationals are required to obtain a work/residence permit from the Ministry of Home Affairs if desirous of being employed in Guyana. It is the obligation of the employer to apply for the work permit by providing the prescribed information in a timely manner. The process can take between 3-6 weeks. SOCIAL SECURITY National Insurance The National and Social Security Act
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Cap. 36:01 provides for the compulsory participation in the National Insurance Scheme. There is no provision which would allow the employee, the employer or a self-employed person to exempt him/herself from participation. The Scheme provides for the payment of short-term, long-term and cash benefits on the basis of the number and level of contributions made by the employed person and his employer or by himself if self-employed. Contributions at the following rates are
compulsory and must be deducted by the employer and paid over by the 15th of the month following the month for which the deduction is made: Employee 5.2% of insurable earnings Employer 7.8% of insurable earnings The self-employed contributes at a rate of 11.5% of insurable earnings. The maximum amount of insurable earnings on which contributions are payable is 143,455 or its equivalent weekly or fortnightly amounts.
T
he Guyana dollar floats freely according to market conditions. On December 31, 2011 the average market selling rate of the US dollar was approximately G$205.21 to US$1. EXCHANGE ISSUES Guyana has abolished all exchange controls and bank and non-bank cambios easily facilitate the conversion and payment of foreign currency. The Customs Act requires a declaration to the Comptroller of Customs when bringing in or taking out of Guyana more than ten thousand US dollars or its equivalent in any other currency. The Bank of Guyana Act 1998 provides that all monetary obligations or transactions in Guyana (whether imposed or authorised by a law or otherwise) are deemed to be expressed and recorded, and shall be settled, in Guyana dollars unless otherwise provided for by law or agreed to between the parties. But such an agreement requires the permission of the Bank of Guyana after consultation with the Minister. Non-resident companies require permission of the Minister of Finance to borrow funds locally. Under the Foreign Exchange Miscellaneous Act 1996, the permission of the Minister of Finance is required for: the lending to or borrowing from any person in Guyana, other than an authorised dealer of any gold or foreign currency; the act of any person resident in Guyana which involves, is in association with, or is preparatory to borrowing any gold or foreign currency from, or lending any gold or foreign currency to any person outside Guyana; the operation of a foreign currency account; and the lending by a person in Guyana of money or securities to a company resident in Guyana but controlled by a person resident outside Guyana.
Currency for the repatriation of interest, capital and income by foreign companies and their personnel. The repatriation of capital out of Guyana is not subject to taxation. ATTRACTING FOREIGN INVESTMENT
have the power to hold land as may be authorised by licence of the President of Guyana. There are also certain restrictions on the size of mining and forestry concessions which foreign investors may hold.
Generally, the foreign investments in which Guyana is interested are those which, among other things: strengthen the infrastructure, with particular reference to services such as financial services, tourism, telecommunications, airport and airline services, shipping and port facilities, hydropower and other electricity generation, housing and hotel accommodation; increase exports and foreign exchange earnings; save expenditure of foreign exchange on imports; develop the country’s natural resources in an environmentally sustainable manner; promote the development and transfer of technology; and promote employment growth and development through the strategic location of economic activities.
ANTI-MONEY LAUNDERING
Ownership of Investments
Reporting entities are required to establish and maintain records as set out by the Act and to report suspicious transactions to the Financial Intelligence Unit. Such entities include banks, money transfer agencies, cambios, pawn-broking entities, credit unions, casinos, used car and car parts dealers, insurers and unit trusts. Attorneys-at-law, notaries, other independent legal professionals and
There are, in general, no restrictions on the proportion of private or foreign ownership of any enterprise or asset. A foreign investor could choose to invest alone, or in partnership with other foreign/local investors and entrepreneurs under the Companies Act 1991. However, under section 333 of the Act, an external company shall
The Anti-Money Laundering and Countering the Financing of Terrorism Act 2009 addresses money laundering, terrorism, serious offences, and requirements for reporting entities. The Act is regulated by the Financial Intelligence Unit of the Ministry of Finance. Among the offences listed as “serious� in the Act are terrorism, trafficking in persons, drugs, ammunition, sexual exploitation, corruption and bribery, counterfeiting, smuggling and insider trading. The Act provides for unlawful proceeds from such crimes to be identified, traced, frozen, seized and forfeited.
The Investment Act 2004 also allows
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accountants are considered reporting entities in respect of certain clients’ transactions, namely, buying and selling real estate, managing client monies, etc. LABOUR The law provides for the compulsory recognition by the employer of a union which has the support of the majority of the entity’s employees. Trade Unions are therefore common and in some sectors they are particularly effective. Even in the absence of a trade union, legislation provides for working hours, the payment of overtime and holidays with pay. The country has a modern set of labour laws dealing with occupational health and safety and termination of employment and severance pay. COMPETITION AND FAIR TRADE This Competition and Fair Trading Act 2006 seeks to promote competition in trade practises and prohibit anticompetitive business conduct in the interest of consumers. The Act
is regulated by the Competition and Consumer Affairs Commission which is empowered, inter alia, to investigate businesses practices including anticompetitive agreements, abuses of dominant positions, resale price maintenance arrangements, bidrigging, and misleading advertising. CONSUMER PROTECTION The Consumer Affairs Act 2011 seeks to promote and protect consumer interests in relation to the supply of goods and services. This Act is also regulated by the Competition and Consumer Affairs Commission. The Act addresses duties of suppliers in matters such as displaying prices, refunds and warranties, unfair trade practises such as dual pricing, pyramid selling and tied goods or services, unfair contracts, electronic sale transactions, and defective and unsafe products. STATUTORY HOLIDAYS The Statutory Holidays are:
1. New Year’s Day - January 1 2. Republic Day - February 23 3. Phagwah - Variable 4. Good Friday - Variable 5. Easter Monday - Variable 6. Labour Day - May 1 7. Arrival Day - May 5 8. Independence Day - May 26 9. Caricom Day - July 1 10. Emancipation Day - August 1 11. Youman Nabi - Variable 12. Eid-ul-Azah - Variable 13. Diwali - Variable 14. Christmas - December 25 15. Boxing Day - December 26
BUSINESS GUYANA - 2012
FOREIGN COUNTRIES
REPRESENTED IN GUYANA Embassy of Australia 82 Premnaranjan Pl., Prashad Nagar Georgetown, Guyana. Tel: 592 231 0798 Fax: 592 231 0799 Email: domosul@yahoo.com Embassy of the Argentine Republic 66 Brummel Place, Stabroek Georgetown Tel: (592) 231-9521-22 Embassy of the Federative Republic of Brazil 308 Church Street, Georgetown Tel: 592 225 7970; 226 9693 Fax; 592 226 9063 Email: bragetown@solutions2000.net guibrem@solutions2000.net Embassy of the People’s Republic of China 2, Mandela Avenue, Georgetown. Tel: 59 2271651 Fax: 592 225 9228 Email: chinaguyana@yahoo.com Embassy of Cuba 46 High Street, Georgetown. Tel: 592 225 1881; 68842
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Fax: 592 226 1824 Email: emguyana@networksgy.com
Fax: 592 225 8497 Email: usembassy@yahoo.com
Embassy of Mexico 44 Brickdam, Stbroek, Georgtown Tel: 592 226 3987 -90 Fax: 592 226 3722 Email: mexicoembassygy@gmail. com
Embassy of the Bolivarian Republic of Venezuela 296 Thomas Street, Georgetown Tel: 592 226 1543; 226 6749 Fax: 592 225 3241 Email: embveguy@gol.net.gy
Embassy of the Russian Federation 3 Public Road, Kitty Georgetown Tele: 592 227 1738: 226 9773 Fax: 592 227 2975 Email: reing@networks.gy.com Embassy of the Republic of Suriname 171 Peter Rose & Crown Streets Tel: 592 226 7844; 225 2631 Fax: 592 225 0759 Email: surnmemb@gol.net.gy Embassy of the United States of America 99-100 Young & Duke Streets, Kingston, Georgetown. Tel: 592 225 4900-9
British High Commission 44 Main Street, Georgetown Tel: 592 226 5881-4 Fax: 592 225 3555 Email: bhcgeo@networks.gy.com Canadian High Commission High & Young Street, Kingston, Georgetown Tel: 592 227 2081-2 Fax: 592 225 8380 Email: grgtn@international.gc.ca Indian High Commission 307 Church & Peter Rose Sts., Georgetown Tel: 592 226 3996; 226 8965 Fax: 592 225 7012 Email: hoc.georgetown@mea.gov.in
Guyana’s Foreign Missions BARBADOS Mr. Michael E. Brotherson Consul General Consulate General of Guyana Barbados. E-mail: micebro@gmail.com BELGIUM H.E. Dr. Patrick Ignatius Gomes Ambassador, Embassy of Guyana 12 Avenue du Bresil 1000 Brussels, Belgium Tele: 322-675-6216 Fax: 672-5598 E-mail: embassy9.guyana@skynet.be BRAZIL, BRASILIA H.E. Kellawan Lall Ambassador, Embassy of Guyana SHIS Q 105 Conjunto 19 Cassa 24 Lago Sul, CEP 71615 – 190 Brasilia DF, Brazil Tele: 55-61-32480874 55-61-3248-0875; 55-61-3364-5319 Fax: 55-61-3248-0886 E-mail:embguyana@embguyana.org.br. RORAIMA Mrs. LEILA KING Consul General, Consulate of Guyana Cel Mota 629, Centro, Boa Vista Roraima, CEP: 69.301-120, Brasil Tel: 001-55-95-3224-6105, 001-55-959-117-4480 001-55-958-119-4868 (cell) Email: daphne5525@hotmail.com OTTAWA, CANADA H.E. Harry Narine Nawbatt High Commissioner High Commission of Guyana 151 Slater Street Suite 305, Ottawa, KIP 5H3. Canada Tele: 613-235-7240 613-235-7249 Fax: 613 - 235 - 1447 E-mail: guyanahcott@rogers.com harrynawbatt@hotmail.com TORONTO, CANADA Mrs. Satyawattie Sawh Honorary Consul General Consulate General of Guyana 505 Consumers Road Suite 206, Willowdale, Ontario M2J 4V8 Canada Tele: 416-494-6040, 416-494-6059
416-494-2679 Fax: 416-494-1530 E-mail: info@guyanaconsulate.com CHINA H.E David Dabydeen Ambassador, Embassy of Guyana No. 1 Xiu Shui Dong Jie Jian Guo Men Wai, Beijing, China Tele: 8610-6532-1601 Fax: 8610-65325741 E-mail: guyemb@public3.bta.net.cn CUBA H.E. Mitradevi Ali Ambassador, Embassy of Guyana Calle 18, No. 506 Entre 5ta y 7ma, Miramar, Havana, Cuba. Tele: 537-204-2094 Fax: 537-204-2867 E-mail: embguyana@enet.cu LONDON, ENGLAND H.E. Laleshwar K. N. Singh, C.C.H. High Commissioner High Commission of Guyana 3 Palace Court, Bayswater Road London, England Tele: 44-207-229-7684 44-207-792-1178 Fax: 44-207-727-9809 E-mail: laleshwarsingh@hotmail.com or guyanahc1@btconnect.com Website: www.guyanahclondon.co.uk NEW YORK, USA Consulate - Republic of Guyana Mr. Brentnold Evans, Consul General Mr. M.R. Khan, Deputy Consul General 370 7th Avenue, Room 402, New York New York 10001 , USA Tel: 212 - 947 – 5115-6, 947 – 5110-9 Fax No: 212 - 947 - 5163 E: guyanaconsulate@hotmail.com INDIA H.E. Jairam Ronald Gajraj High Commissioner High Commission of Guyana B-3/20 Vasant Vihar New Delhi - 110057, India Tel: 9111-4166-9717/8 (Office) Fax: 9111-4166-9714 High Commissioner: 9111-4166-9715 or 4166 9716 E-mail: hcommguy.del@gmail.com
BUSINESS GUYANA - 2012
KUWAIT H.E Dr. Odeen Ishmael, CCH Ambassador, Embassy of Guyana Block 3, Street 321, Villa 3 Mubarak Abdullah Al Jaber, West Mishrif, State of Kuwait Tel: 965-2539-7939; 965-2539-4336 Fax: 965-2539-3448 Email: guyanaembassy.kuwait@gmail.com PARAMARIBO, SURINAME H.E. Keith George Ambassador, Embassy of Guyana Henckarronstraat No. 82, P.O.Box 785 Paramaribo, Suriname Tele: 597-477-895, 597-472-509 Fax: 597-472-679 E-mail: guyembassy@sr.net NICKERIE Mr. Arlington Bancroft Consul General Consulate General for Guyana Gouverneur Straat & West Kanaal Straat No. 10 Nickerie, Suriname Tele: 597-211-019 Fax: 597-212-080 PERMANENT MISSION TO THE UN H.E. George Talbot Permanent Representative Permanent Mission of Guyana to the UN 801 Second Avenue, Fifth Floor New York 10017 USA. Tele: 212-573-5828 Fax: 212573-6225. E-mail: Guyana@UN.int WASHINGTON DC, USA Embassy of the Republic of Guyana H.E. Bayney Karran - Ambassador 2490 Tracy Place, N. W. Washington , D.C. , 20008, USA Tel: 202 - 265 – 6900-1 Fax: 202 - 232 -1297 E: guyanaembassydc@verizon.net VENEZUELA Embassy of the Republic of Guyana H.E. Geoffrey Da Silva, Ambassador Quinta Roraima, Avenida El Paseo Prados del Este, Caracas 1050, Tele: 58 212 977 1158, 975 3687 Fax: 58 212 - 976 – 3765 E-mail: embguy@cantv.net
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BUSINESS GUYANA - 2012
Business Contacts PRIVATE SECTOR ORGANISATIONS Private Sector Commission Umbrella organization for most private sector business and employer organisations. Most major companies are also members. 157 Waterloo Street, N/Cummingsburg, Georgetown. Tel: 592-225-0977 Fax: 592-225-0978 Email: office@psc.org.gy Website: www.psc.org.gy
CHAMBERS OF COMMERCE Georgetown Chamber of Commerce & Industry 156 Waterloo Street, N/Cummingsburg, Georgetown. Tel: 592-227-6441 or 55846 Tel/fax: 592-226-3519 Email: gtchambe@networksgy.com Website: www.gccigy.org Berbice Chamber of Commerce and Development 12 Chapel Street, New Amsterdam, Berbice Tel: 333-3324 Email: bccda@guyana.net.gy Linden Chamber of Commerce and Industry 97 Republic Avenue, McKenzie, Linden Tel: 444 2901 Fax: 444 4057 Email: infodesk@lindenchamber.org.gy Website: www.lindenchamber.org.gy Rupununi Chambers of Commerce and Industry Block ‘A’ Takatu Drive, Lethem, Rupununi, Region 9 Tel: 772-2213 Email: rupununircci@yahoo.com Upper Corentyne Chamber of Commerce & Industry Lot 52 East Public Road, No. 78 Corriverton, Berbice. Tel: 335-3199/335 3738 Fax: 335-3738 Email: ucci_9@yahoo.com/ hemchand@yahoo.com Central Corentyne Chamber of Commerce 65 A Public Road, Rosehall, Corentyne, Berbice. Tel: 337 4778 Email: central_chamber@yahoo.com West Demerara / East bank Essequibo & Islands Chamber of Commerce and Industry. Ocean View Dr. Ruimzeight, West Coast Demerara. Tel: 269 0020 269 0030 Fax: 269 0022 Email: westdemerara_chamber@yahoo.com
BUSINESS ORGANISATIONS Consultative Association of Guyanese Industry 157 Waterloo Street, N/Cummingsburg, Georgetown Tel: 592 226 4603/57170 Fax: 592 227 0725 Email: ramchancagi@aol.net.gy Forest Products Association of Guyana 157 Waterloo Street, N/Cummingsburg, Georgetown Tel: 592 226 9848 Fax: 592 226 2832 Email: fpasect@guyana.net.gy Guyana Manufacturers’ & Services Association 157 Waterloo Street, N/Cummingsburg, Georgetown
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Tel: 592 223 74 05-06 Fax: 592 225 5615 Email: gma_guyana@yahoo.com Website: www.gma.org.gy Guyana Association of Travel Agents Wm Fogarty Building 34-37 Water Street, Georgetown. Tel: 592 227 7225 Fax: 592 225 2513 Guyana Rice Producers’ Association Public Road, Crane, West Coast Demerara. Tel: 254 2012-13 Email: kumarraj7167@yahoo.com Institute of Private Enterprise Development 253 South Road, Bourda, Georgetown. Tel: 592 225 8949/64675 Fax: 592 223 7834 Email: rameshpersaud@acca.com Website. www.ipedgy.com Tourism and Hospitality Association of Guyana (THAG) 157 Waterloo Street, N/Cummingsburg, Georgetow. Tel: 592 225 0807 Fax: 592 225 0817 Email: thag.secretariat@gmail.com Website: www.exploreguyana.org
GOVERNMENT OFFICES & AGENCIES Ministry of Tourism Industry & Commerce 229 South Road, Lacytown, Georgetown Tel: 592 226 2505 Fax: 592 225 4310 Email: wmilton_ps@yahoo.com Ministry of Foreign Trade & Int’l Co-operation 254 South Road, Bourda, Georgeotwn. Tel: 592 227 7726 Fax: 592 223 0900 GO-INVEST(Guyana Office for Investment) 190 Camp & Church Streets, Georgetown. Tel: 592 0658/227 0653 Fax: 592 225 0655 E-mail: goinvest@goinvest.gov.gy Website: www.goinvest.gov.gy Guyana Rice Development Board 117 Cowan Street, Kingston, Georgetown. Tel: 592 225 8717 Fax: 592 225 6486 Email: grdb@gol.net.gy Guyana Tourism Authority National Exhibition Centre, Sophia, Georgetown. Tel: 219-0094-6 Fax: 219 0093 Email: info@guyana-tourism.com Website: www.guyana-tourism.com
REGIONAL ORGANISATIONS CARICOM - The Caribbean Community Secretariat P.O. Box 10827, Turkeyen, Greater Georgetown. Tel: 222 0001-75 Fax: 222 0171 Email: registry@caricom.org Website: www. caricom.org